By Jon King, Michigan Advance
When Gov. Gretchen Whitmer delivered her final State of the State address Wednesday, she touched on early literacy, housing reform and other domestic priorities. However she conspicuously ducked a mounting crisis that’s heating up in communities across the state: the explosive growth of hyperscale data centers and the swelling opposition they’re generating.
Whitmer closed her address with a confident sign-off — “Big Gretch Out” — a nod to the persona that has become part of her national brand. But on the defining economic development controversy unfolding across Michigan, the slogan lands awkwardly.
When it comes to the state’s all-in bet on data centers, the governor was, in fact, conspicuously out — absent from a debate that is reshaping local politics, testing progressive principles and dividing her own party.
Just hours before her speech, the Michigan House Oversight Subcommittee hosted Christy Gillenwater, a retired senior management consultant, to lay bare the risks these facilities pose — not only environmentally and economically, but to residents’ long-term financial security.
Gillenwater warned lawmakers that the AI bubble could burst, leaving unfinished or abandoned “stranded assets” in its wake, and that maintaining generous tax breaks for data centers, including exempting them and certain equipment from the state’s sales tax, would ultimately harm Michiganders’ access to clean land, water, and stable infrastructure.
And yet, in an address meant to chart a governing legacy, Whitmer offered nothing resembling a serious interrogation of Michigan’s all-in approach to luring these projects.
That omission isn’t just tactically weak — it’s politically tone-deaf.
Across the Midwest and beyond, leaders from both parties are recalibrating their stance on data centers because the public backlash has grown increasingly potent.
In Pennsylvania, Gov. Josh Shapiro has steered his messaging to emphasize community protections and the principle that developers should “pay for their own power” rather than saddle residents with higher utility costs — a rare instance of a sitting Democrat trying to thread the needle between economic development and constituent concerns about costs and local impacts.
In Illinois, Gov. J.B. Pritzker has gone even further, calling for a two-year suspension of tax incentives for new data center developments so that policymakers can study their impacts on energy demand, infrastructure stress, and utility affordability — a clear acknowledgment that the old hands-off, subsidy-first model no longer works.
Both gestures — introspection and pause — signal that at least some of Whitmer’s Democratic peers recognize that the tech-booster narrative isn’t cutting it with voters who are worried about electric bills, strained grids, water use or disappearing local control.
Here at home, the political landscape already reflects that discontent. More than a dozen Michigan communities have enacted or are considering moratoriums on data center construction as residents push back against what they see as unchecked corporate giveaways. And a bipartisan group of state lawmakers is pushing legislation to repeal the tax breaks Whitmer championed in 2025 — a defeat for the “free-market growth” strategy that once animated Lansing economic policy.
Yet this is precisely where the silence becomes glaring.
The governor celebrated clean, reliable energy to “power everyone’s homes” and touted massive water infrastructure upgrades, but said nothing about the extraordinary electricity and water demands of the hyperscale data centers her administration has aggressively courted. A message seeking comment from her office went unreturned.
These facilities consume staggering amounts of power, straining local grids, while relying heavily on water for cooling, often in the very communities now being told resources are secure and sustainable. The contrast underscores the tension at the heart of Michigan’s strategy: you cannot simultaneously champion environmental stewardship and infrastructure resilience while declining to address how subsidizing energy-intensive data centers complicates both.
Ignoring this shifting political and economic terrain looks less like leadership and more like wishful thinking. Whitmer’s strategy may have made sense at a moment when states were aggressively chasing AI cachet and hyped growth, but Michigan’s embrace of data centers has become increasingly unmoored from progressive priorities like environmental justice, consumer protection, and equitable economic development.
It’s ironic — and revealing — that while proponents of data centers tout high-tech jobs and big investments, a respected outside consultant was in Lansing warning of an AI stock bubble on the very same day the governor spoke. Gillenwater pointed out that these facilities don’t actually produce the kind of “artificial general intelligence” the public worries about — but they do carry very real risks to local infrastructure, transparency and taxpayer value.
The refusal to grapple with that reality in a statewide address is more than a missed opportunity. It’s a signal that Whitmer’s administration refuses to confront the contradictions at the heart of Michigan’s data center strategy — even as other state leaders have begun doing so, most notably Michigan Attorney General Dana Nessel, who has continued to fight for more transparency in how data centers are approved.
Michigan’s data center gamble is no longer just an economic development strategy. It’s becoming a political litmus test for whether state leaders still prioritize people over corporate subsidies.
Michigan Advance is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Michigan Advance maintains editorial independence. Contact Editor Jon King for questions: info@michiganadvance.com.
