Inside data center walls, Microsoft’s Malaga investment reaches across NCW

MALAGA — Inside one of Microsoft’s unfinished data halls, thick electrical cables run from overhead busways to rows of steel load banks. The servers have not arrived yet. Before they do, the company will push the building’s electrical systems to their limits.

“We’re trying to break it so that if it does break, we can fix it before we turn it over to operations,” Microsoft Regional Construction Director Josh McCleary told visitors touring the campus Sept. 17.

Outside, another data center is beginning to rise from newly poured foundations. Two data halls at the Malaga campus are already operating, while three more inside the toured building are advancing through construction, testing and turnover.

The campus is large, but deliberately remote. It lies beyond Malaga’s residential center, surrounded by industrial land and open space. Microsoft’s East Wenatchee campus is similarly removed from the city’s populated core, north of Pangborn Memorial Airport.

That siting is part of a larger regional bargain that has largely developed outside public view.

Microsoft’s data centers require land, electricity and water. They also represent enormous private development, hundreds of construction jobs, an expanded tax base and company-funded infrastructure intended to prevent the cost of serving the facilities from falling on existing residents.

In Malaga and Chelan County, Microsoft has invested approximately $51 million in water projects, including $16.4 million for a cooling-water discharge facility. The company is also paying for the electrical infrastructure required by its campuses, including the $86.5 million Jumpoff Ridge substation under development by Chelan County PUD.

“Paying our way” is one of Microsoft’s community-first infrastructure commitments, Data Center Operations General Manager Navin Sathi said during a community celebration on Sept. 17.

“The cost of serving our data centers is not shifted to residential electrical customers,” Sathi said.

The Malaga facilities are conventional cloud data centers rather than campuses built specifically to train generative artificial intelligence models. Their eventual rows of servers will support the less visible digital infrastructure used throughout ordinary life, including business systems, online banking, shopping, communications, schools, hospitals and other services that depend upon information remaining secure and continuously available.

Each data center can take four to five years to move from planning and design through construction, commissioning and turnover to operations. McCleary said the local construction portfolio he oversees brings approximately 1,200 to 1,400 workers onto job sites each day.

Before an individual data hall becomes operational, load banks simulate the full electrical demand of rows of servers. The system is pushed to maximum capacity so failures can be found and corrected before customer data is placed inside.

Microsoft also paved the parking area used by construction workers, reducing dust generated as hundreds of vehicles arrive and leave each day.

Cooling remains one of the most consequential parts of data-center operation.

Water supplied by the Malaga Water District is cycled repeatedly through the cooling system. Once its quality no longer allows it to be reused inside the data center, it travels through a transmission line to a discharge facility owned and operated by the Chelan-Douglas Regional Port Authority.

There, the water enters open-air basins before being distributed through spray fields that irrigate vegetation around the property. It is not discharged directly into the Columbia River.

During commissioning, McCleary said the company discovered material coming off filters installed in the facility. Microsoft spent nearly $1 million replacing all of them.

“Our boss was like, ‘No, we can’t have any issues with the water,’” McCleary said. “We have a commitment to returning clean water to the public.”

The company has pledged to replenish more water than its data centers consume by 2030. It also funds the infrastructure needed to move, treat and reuse water associated with the facilities.

Since 2017, Microsoft has invested more than $8 million in community initiatives across Chelan, Douglas and Grant counties, supporting education, workforce development, digital access, parks, environmental projects, public safety, housing and human services.

The company’s arrival has also created work for tradespeople throughout the region.

Matthew Hepner, executive director of the Certified Electrical Workers of Washington, began working in data centers as an apprentice electrician in 2006 after serving in Afghanistan as a Marine. He later spent a decade working in and around the facilities.

“My story is not a one-off,” Hepner said. “It’s not original.”

Hepner, who represents approximately 12,000 IBEW electricians statewide and serves on the East Wenatchee City Council, said thousands of workers have used data-center jobs to support families, purchase homes and become part of Central Washington communities.

Electricians alone earned approximately $1.2 billion — “with a B,” said Hepner — from data-center work in Washington and Oregon during 2025.

Microsoft’s education partnerships began years before construction reached Chelan County. NCW Tech Alliance CEO Sue Kane said the company has worked with regional schools and workforce organizations for more than a decade.

Data-center preparation programs at Wenatchee and Eastmont high schools now have dozens of students working toward certifications intended to qualify them for jobs as local facilities become operational. Microsoft has also supported digital-skills programs for small businesses and career-connected learning efforts across the region.

Kane acknowledged broader uncertainty surrounding rapid data-center expansion and said communities should distinguish among the companies entering the industry.

“The kinds of neighbors that we want to cultivate are the kinds of folks that care enough about us to build those trusted relationships, that lean in and listen when you tell them what you value,” Kane said.

NCW Tech Alliance has received ongoing Microsoft support, but Kane said the relationship has been demonstrated through more than grants or public events.

“It’s not just talk,” she said. “They’re really good neighbors.”

Much of that work has received less attention than the enormous gray buildings rising at the region’s outskirts. The buildings are difficult to miss once reached, but most residents will never encounter them in daily life.

The infrastructure inside them is nearly as invisible as Microsoft’s broader investment outside their walls. Both are intended to remain in the region for decades.

Andrew Simpson: 509-433-7626 or andrew@ward.media