Microsoft's New AI Lab Powers Wisconsin Manufacturing

Microsoft Corp MSFT, in partnership with the Wisconsin Economic Development Corporation (WEDC), the University of Wisconsin-Milwaukee (UWM), and TitletownTech, announced on Wednesday the opening of an AI Co-Innovation Lab on the UWM campus.

It marks Microsoft’s first AI Co-Innovation Lab dedicated to manufacturing innovation. The lab’s launch comes one year after Microsoft’s $3.3 billion investment to build AI infrastructure in Wisconsin. 

From real-time fault detection in industrial machinery to multilingual voice assistants that streamline gate, dock, and yard logistics, local companies are working to apply Microsoft’s AI technologies to improve operations and decision-making. Others are building tools to forecast supply chain lead times, manage hydroponic farms, and deliver proactive customer support.

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The lab also works with organizations across industries, including small and medium-sized businesses, enterprises, startups, and academia. This reflects the broad networks and experience of the lab’s founding partners: Microsoft, WEDC, UWM, and TitletownTech.

In January 2025, Microsoft announced it would temporarily pause construction on parts of its data center project in Mount Pleasant, Wisconsin. However, the company confirmed it still plans to finish the data center’s first phase, with a total investment of $3.3 billion expected by the end of 2026.

The Mount Pleasant site holds a historical context: it was originally selected for a Foxconn megaproject that was ultimately canceled. Foxconn, formally known as Hon Hai Precision Industry, is a multinational electronics contract manufacturing company and a major supplier for Apple Inc. AAPL. Foxconn had initially pledged a $10 billion investment in the area, but this commitment was later reduced significantly to $672 million.

Microsoft has made substantial financial commitments to AI development, allocating approximately $80 billion in fiscal 2025 to develop data centers globally. These data centers are crucial for supporting AI model training and deploying AI and cloud-based applications.

In May 2025, Microsoft showcased new products and partnerships with OpenAI, Nvidia Corp. NVDA, and Elon Musk’s xAI, all targeting Microsoft Azure cloud clients to sell AI models during its annual Build conference in Seattle. Microsoft introduced a new coding “agent,” among other innovations.

Goldman Sachs analyst Kash Rangan told the Financial Times that Microsoft is the AI ringleader, citing it as the top platform and catalyst for making models work.

MSFT Price Action: MSFT stock was trading higher by 0.31% to $493.82 premarket at last check Thursday.

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