Opinion | Minnesota should be fighting to build data centers

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Minnesota faces a critical choice right now.

A once-in-a-generation economic opportunity is unfolding across the country as companies race to build the infrastructure that powers artificial intelligence, cloud computing and the broader digital economy. States that move decisively are securing billions in private capital, thousands of high-wage jobs and new anchors for long-term tax stability.

Minnesota ought to be leading this race. Instead, we are watching it slip away.

The clearest example is a failed project in Becker, Minn. Amazon Web Services purchased roughly 350 acres near the soon-to-be closed Sherco coal plant. The project represented a multibillion-dollar investment, supported up to 15,000 construction job-years, and would have created hundreds of permanent, high-skill positions. For a community recovering from the phase-out of Sherco, it would have been transformative. Additionally, Xcel energy had obligated itself to spur economic development, via their IRP, for all the jobs lost to the closing of Sherco.

Then the permitting process started.

Minnesota already has robust air permitting, through the MPCA, around any industry that uses diesel generators as part of operations. These existing standards, and EPA standards, apply to new hyperscale data center projects, and this is standard across the country. This same permitting may also include additional environmental review around bulk fuel storage.

Amazon paused their project, and developers nationwide looked elsewhere for opportunities to invest.

And Becker wasn’t an isolated incident. Major data center developments in Hampton and North Mankato are now also stalled in regulatory limbo.

Every Minnesotan should be frustrated by this because Minnesota has every natural and structural advantage needed to build a regional data center hub.

Axios identified the Upper Midwest as an emerging national corridor for AI-driven data expansion — with Minnesota squarely in the center of it. Our cold climate cuts cooling costs and our energy grid is stable. Xcel Energy’s integrated resource plan anticipates precisely the type of load growth over the coming decade data centers will require. And we have elite building trades, deep fiber networks and have historically had a mature regulatory tradition that — at its best — pairs high standards with dependable outcomes.

In other words, the table is set for Minnesota to seize this immense opportunity, and the state is frittering it away.

Opposition to data centers usually focuses on three issues: confidentiality, water use and energy demand. These concerns deserve a serious hearing — and thoughtful answers — but none justify shutting the door on an entire sector.

Sometimes communities raise concerns on confidentiality, but early-stage confidentiality is standard across advanced manufacturing, semiconductor fabrication and major energy projects. It protects competitive site negotiations, while Minnesota’s permitting rules ensure full disclosure of water and energy use once a project enters the public process.

Water use also warrants scrutiny, especially during drought cycles. That’s precisely why the Legislature now requires early coordination with the Department of Natural Resources for large water users and why modern data centers increasingly recycle cooling water or rely on air-based systems that sharply reduce consumption.

Energy demand is the hardest issue, and it deserves clear-eyed discussion. Minnesota has begun exploring tools to protect residential ratepayers — including new rate structures and, in some cases, fees on very large facilities — though any final approach should ensure competitiveness while maintaining fairness. Minnesota’s 2040 carbon free-energy pledge aligned with the energy-use goals of most hyperscalers.

This is not the first time Minnesota has had to balance development with environmental stewardship. We created some of the nation’s most stringent mining and water-quality standards, and those industries adapted. We expanded agriculture while maintaining some of the strongest conservation rules in the Midwest.

The formula has always been the same: set clear expectations, enforce them and decide in a timely manner. Data centers require the same.

Minnesota doesn’t need to compromise its values to compete. The state simply needs to offer clarity, speed and consistency.

Here’s what would make an immediate difference:

These steps would protect natural resources and give companies the certainty needed to commit billions in private capital.

We can lead the next era of the digital economy. Or we can watch billions of dollars, thousands of jobs and long-term tax stability move to states willing to act faster.

Minnesota has the assets. We now need the urgency. The window is open — but not for long.