Microsoft Malaga (Wenatchee) data center, Malaga, Washington

Microsoft's first data center campus in Chelan County, on Malaga Alcoa Highway in Malaga, Washington, is partly running, with a second building under construction and a third planned. Microsoft has filed permits for three buildings on about 102.5 acres at 5375 Malaga Alcoa Highway and could build up to six, depending on demand.

Microsoft bought the land in 2022, including the 72.5-acre former Lojo property for $6.6 million, and began clearing the site in 2023; the land once held orchards, near the Alcoa Wenatchee Works aluminum smelter that closed in 2021. One building permit describes a one-story, 244,440-square-foot building valued at about $56.8 million, with 72 workers on site at peak shift; Microsoft's presence in North Central Washington began about 20 miles away in Quincy in 2006.

Water is the question neighbors keep asking. In July 2026 Malaga residents raised concerns at a public meeting on a $50 million expansion of the Malaga Water District's system, which Microsoft is paying for. "Nobody knows exactly how big the Malaga aquifer is and how much water is in it; separate from the one in the Columbia River," said resident Lois Munro.

"We made an agreement with the port, and with Microsoft, and with us, to give them water," said water district commissioner Staci Shearer. "But we can shut their water off at any given time because our residents need it, and our residents are going to come first." Microsoft's Lisa Karstetter said the three buildings will use "6 million gallons of water annually, for a total of about 18-19 million gallons per year at full buildout," compared with about 129 million gallons a year the orchards once used.

The first three buildings use an older direct evaporative cooling system; later buildings could use closed-loop or air cooling, though those plans are not final. Microsoft says the three buildings will draw up to about 150 megawatts of power at full buildout, and a Chelan County PUD contract covers up to 288 megawatts of power for the site through 2040 as more buildings are added.

Microsoft declined to give figures on its state tax incentives; Washington exempts data center server equipment and power infrastructure from sales tax. Microsoft paid $1.5 million, a third of the cost, to renovate the Malaga fire station, which reopened in 2025, and is funding three of its firefighter positions.

The water district's commissioners control the water supply, and the Chelan Douglas Regional Port Authority manages the water system work on the district's behalf. Microsoft's second building, toured by Chelan County officials on September 17, 2026, is expected to be operating by January 2028, with a third building expected by late 2028.