Microsoft Alviso-Milpitas data center, San Jose, California

Microsoft broke ground in June 2026 on its Alviso data center campus at 1657 Alviso-Milpitas Road in northern San Jose, Santa Clara County, California, its first self-owned and operated data center in the city. The first phase will offer 48 megawatts of computing capacity, according to the contractor building it. In a filing with the California Energy Commission, Microsoft listed the campus's maximum electrical load at up to 99 megawatts of power, with an estimated everyday load of 77 megawatts.

The campus is due for completion in 2028, with an estimated 600 construction jobs and 100 jobs once it is running.

Microsoft bought the 64-acre site along Highway 237, next to the Los Esteros Energy Center, in 2017 for $73.2 million. The plan calls for two single-story buildings of about 397,000 square feet in total and a new electrical substation; 79 trees are to be removed and 273 planted. The San Jose Planning Commission approved the project in April 2025, after an earlier version filed in 2019 had stalled; the site had been used as a homeless encampment, and people living there were reportedly told to leave in April 2025.

"You need this backbone of infrastructure to power the modern world," Mayor Matt Mahan said at the groundbreaking. Many San Jose residents disagree. At an April 2026 council session on the city's push to attract a dozen large power users, Ellina Yin of the Dreaming Collaborative said, "There has been an incredible push from the city to bring data centers for AI, however there has been little to no meaningful community engagement on what that means for San Jose residents living within and around these data centers."

Alviso is also the site of a larger proposal: Prologis is in talks with the city for a 159-acre site for more than 1 million square feet of data center space across four buildings. "A lot of this is being pretty much pushed on the community," said Marcos Espinoza, president of Alviso in Action, who said residents worry about noise, air pollution and nearby burrowing owl habitat.

San Jose city staff are drafting data center review standards covering air quality, noise, greenhouse gas emissions and public outreach, which are expected to go to the City Council in December 2026. Those rules would apply to future projects; the Microsoft campus already has its approvals and is under construction, with contractor HITT Contracting putting the build at about 18 months.