A small town in Central Washington is Microsoft's answer to the data center backlash

Quincy is a small farming town in Central Washington near the Columbia River, home to one of the world’s top french fry producers. It’s also the model for Microsoft’s nationwide data center strategy.

On Tuesday, Microsoft announced a series of commitments intended to assuage a growing backlash to the data center building boom. The company held up Quincy — where it has been building data centers for about 20 years — as an example of how communities could benefit from the massive infrastructure projects.

Under the plan, Microsoft says it will ask local utilities to charge rates high enough to cover data center energy usage and upgrade electrical infrastructure without raising prices for residents. The company plans to build new data centers using a closed loop water system that recycles the water used to cool servers, rather than drawing on local reserves. Microsoft also pledged not to accept tax incentives or subsidies from local communities, and made other commitments around workforce training.

“ We will add to the tax base that funds your local hospitals, your schools, your parks, your libraries … and I think no place better illustrates this than the small town where Microsoft built its first data center,” said Microsoft President Brad Smith during an announcement event in Washington, D.C.

Microsoft’s pledge comes amid growing backlash to data center projects across rural America. Opponents claim the massive computer farms that power everything from smart TVs to the artificial intelligence boom cost too much in resources and offer too few jobs in return.

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In Quincy, that tension is less acute. Data centers there have access to hydropower from the Columbia River. Though each facility can run with 50 employees or fewer, there are so many data centers in the area that they have become a substantial job creator in aggregate. Plus, the data center boom is several decades old, so infrastructure investments from the added tax dollars are visible to residents. They include a state-of-the art high school and hospital.

"If you want to visit what’s probably the nicest high school in the state of Washington, you don't go to the neighborhood where Microsoft's headquarters is based," Smith said. "You don't go next door to Amazon, you go to Quincy.”

Still, even in Quincy the data centers have their critics. Former Mayor Patty Martin has been advocating against the facilities since they first came to town.

“ It's great to look at the economic benefits,” she said in an interview last year. “That's a snapshot in time. That's something you benefit from right now. The question is, what's a long-term effect? What about 10 years, 20 years from now, and these facilities are still here and the electrical grid, because now there's more people, there's more electric cars, there's not as much water running in the river because the snow packs aren't there. What's the long-term impact for the short-term gain that we have? I just think that sometimes we're a little bit too shortsighted.”

Microsoft’s new data center projects are also facing pushback. The company pulled out of a plan to rezone a stretch of rural Wisconsin for a data center when faced with community opposition. Microsoft found other locations in the state with less resistance.

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A recent Pew Research study found that data centers used about 4% of the country's electricity in 2024, roughly the amount of electricity used each year by the entire country of Pakistan. As the demand for computing power to supply the AI boom grows, many residents around the country are concerned they will end up bearing the cost in their electricity bills.

“ The truth is infrastructure buildouts progress, only when communities conclude that the benefits outweigh the costs, and we are at a moment in time when people have a lot on their mind,” Smith said. “They're worried about the price of electricity. They wonder what this big data center will mean to their water supply. They look at this technology and ask, what will it mean for the jobs of the future … We need to listen and we need to address these concerns head on.”