Microsoft has spent all year telling communities that when it brings a new data center into their area, it is committed to being a “good neighbor.” It will pay local property taxes that support local hospitals, schools, parks, and libraries, and it will invest in “vital services the community cares about,” the company promised. And it has sent liaisons into those communities to learn what those needs are.

But ask those liaisons how much the company is willing to invest, and the answers can be hard to come by.

At community meetings, Microsoft representatives have seemed unprepared to answer questions that go beyond the company’s “good neighbor” campaign materials, Ars has learned. The company has acknowledged in public-facing documents that simply matching its employees’ charitable donations—which totaled $229 million across 29,000 nonprofits in 2024—isn’t enough. But it has been vague about what more substantial local investments might look like. And to critics, Microsoft’s local investments seem especially small compared with the estimated hundreds of millions in state-level tax breaks that data center developers get in 38 states—exemptions that often last more than a decade.

In Georgia, a recent audit found that the state “gave up $474 million in sales taxes in one year—and got back just $41 million from the industry,” journalist Ronan Farrow reported. Why Georgia is willing to give away so much in tax breaks is unclear, Farrow noted, since “by the state’s own estimate, 70 percent of the data center construction would have happened anyway.”

Some communities are starting to question that logic. In Indiana, for example, big firms like Microsoft can buy data center equipment without paying the state’s 7 percent sales tax. The exemption could apply to as much as $13.2 billion in projected equipment purchases. Without the exemption, up to $900 million could have been added to the tax base supporting state programs, Indy Mirror estimated. And the exemption can last for 50 years, which has some residents wondering how much their communities are giving up to attract data centers.

While Microsoft stands to benefit enormously from such tax breaks, the community living around a 900-acre Granger data center in St. Joseph County is suffering, according to We Make Indiana, a local nonpartisan group of about 25 congregations and community organizations.

Last year, the state passed a property tax savings bill that reportedly hamstrung local governments’ ability to raise revenue for community services. As vital services deteriorated, We Make Indiana spent the past six months trying to alert Microsoft to the most urgent community needs in areas like health care, child care, elder care, transportation, and affordable housing.

Recently, it became clear that Microsoft was not prepared to meaningfully help address the bigger issues plaguing South Bend. We Make Indiana was disappointed to learn from a company liaison that Microsoft will only approve a series of one-time nonprofit donations totaling up to $1 million. We Make Indiana believes that maximum budget is not proportionate to the tax savings or improved profit margins Microsoft will get from operating the Granger hyperscaler.

When it comes to community investments, Microsoft appears to be no better or worse than other companies building data centers. Amazon, another big player in the field, may not have offered environmental commitments as strong as Microsoft’s, but it has also provided one-time grants of hundreds of thousands of dollars to a handful of local charities, We Make Indiana members told Ars.

If Microsoft really wants to become a role model for responsible data center development, it could do much more with its “community-first AI” platform to benefit its neighbors over the long term, We Make Indiana argues. The group has even offered a vision for how that could work. In May, it sent the company a proposal calling for Microsoft to negotiate directly with community members on a binding agreement under which Microsoft would agree to donate a small portion of its data center costs to the county each year.

“Microsoft has publicly stated that it wants to be a good neighbor,” the group’s proposal said. “This is an opportunity to demonstrate what that means.”

How much should Microsoft share?

Through the proposed “Fair Share Agreement,” Microsoft would establish a fund to address social and environmental impacts from its $1 billion data center. An independent board would oversee payouts from the fund to ensure maximum community impact. Over the lifetime of the data center, including during construction, Microsoft would be expected to contribute a fair percentage of its annual costs to the fund, We Make Indiana proposed.

Their idea is not new, but it hasn’t caught on widely yet.

Most prominently, US Sen. Bernie Sanders (I-Vt.) has introduced a plan for a national “sovereign wealth fund” that would force AI firms to donate as much as $7 trillion to benefit Americans. But Sanders’ proposal is far broader than what We Make Indiana is asking for. A closer parallel is the Data Center Fair Share Act, a bill introduced in Pennsylvania by Democratic state Sen. Lindsey M. Williams.

That bill would require data center developers to enter into legally binding “community benefits agreements” with community organizations. Those agreements would require firms to share “at least 10 percent” of the project’s total cost with a fund prioritizing investments in areas like workforce development, environmental improvements, public safety, infrastructure, affordable housing, energy consumption, or other beneficial uses.

Ryan Juskus, a leader with We Make Indiana, told Ars that his group believes asking for 10 percent “is very much on the high end.”

Initially, We Make Indiana planned to ask for as little as 1 or 2 percent, as the group estimated that even a 1 percent share could add approximately $30 to $40 million annually to community programs. But instead of approaching Microsoft with a firm offer, their proposal asked Microsoft to assess what percentage might be fair.

Additionally, they asked Microsoft to agree to meet higher environmental standards, particularly on issues related to water/energy use, air quality, sustainability, and workforce protections.

In South Bend, such binding commitments from Microsoft would make a substantial difference and set a high bar for other data center developers negotiating with local governments in the state, We Make Indiana suggested.

“It’s kind of like asking Microsoft to help us solve our challenges when the state has abandoned us,” Juskus told Ars.

“We would love to see Microsoft show leadership in an area that needs real leadership right now around doing data centers better, and who better to do that than Microsoft in partnering with a community like ours that has been a very struggling community for a long time?” he added.

Microsoft silent on paying “fair share”

But Microsoft has gone silent since receiving the proposal, despite the company’s bold promises to support “the entire community.” A spokesperson told Ars that the company considers the proposal an important part of its community listening process but said it’s too early to discuss it because Microsoft is still engaging other community leaders.

“Microsoft remains committed to developing our data center project in Granger in partnership with the community,” Microsoft’s spokesperson said. “This process will include investments in areas that reflect local priorities. We appreciate the community’s efforts to share their priorities with us—their input, including the community proposal we received, is an invaluable part of this process. At this early stage of development, investment decisions have not yet been made.”

Still, the company has approved some initial grants. Microsoft’s announcement did not detail how much each group will receive, but so far, the company has prioritized educational nonprofits and a community college, with the goal of building digital skills and helping people feel more comfortable with using AI. The company has also set up a land trust that “preserves and restores natural lands and waters in northwestern Indiana” while donating to groups dedicated to hunger relief and community volunteering.

These donations, Juskus told Ars, are “completely not proportional, not ongoing,” and “entirely” on Microsoft’s terms. Accepting these one-time investments when the community knows developers are extracting much more value from building in their location seems short-sighted, he suggested.

“It frankly just kind of buys silence,” Juskus said.

To Juskus’ group, which is built on community relationships, it seems “easy to be a ‘good neighbor’ when you get to set the criteria and evaluate your progress all by yourself. A real neighbor discerns what’s to be done through relationships and accountability,” Juskus said.

Responding to Microsoft’s statement, Juskus expressed doubts that the data center investments will help South Bend residents where they need it most.

“Efforts by County Council members and the community to get binding commitments related to water, energy use, and decommissioning plans to reduce the harm of this project are met with vague and noncommittal public relations responses from Microsoft,” Juskus said. “The community enhancement donations that Microsoft is pledging to nonprofits in our county are miniscule, given the project’s scale.”

To drum up local support for their proposal, We Make Indiana is planning a series of public demonstrations to highlight the contrast between the tax breaks data center developers stand to receive and the cuts to basic services like bus lines and health care the community faces. They hope to make enough noise to convince county officials to use upcoming negotiations over additional tax incentives as leverage to secure a binding commitment from Microsoft to invest in community well-being over the long term. They also expect such messaging could make it harder for officials seen as favoring corporate interests to win elections as data center backlash mounts nationwide.

“In a fast-changing local and national environment, we will continue to organize our community and elected leaders to use every piece of leverage we have to bring Microsoft to the table for real conversation and negotiation,” Juskus said. “Microsoft claims to want to be a good neighbor, but the jury is still out.”

Microsoft likely ignoring “real dissent”

We Make Indiana first presented its proposal at a meeting with Microsoft’s liaison in a church.

“What we have is a concept,” the group told Microsoft’s representative. “And what we want is for Microsoft to enter into negotiation,” Juskus said. That way, “we could work out something that isn’t just imposed from above.”

The rep—whom Microsoft declined to connect Ars with despite a month of back-and-forth—promised We Make Indiana that she would check back in after admitting that the group’s request was “way beyond her or even her boss’s purview,” Juskus said.

The next week, Microsoft held an open house, and We Make Indiana showed up with 75 community members to prove there was community support for their proposal. But the open house seemed more like a PR campaign than a sincere attempt to engage the community, attendees told Ars.

“The specialists Microsoft brought out to the open house here in the county had talking points with little substance,” Juskus said.

For example, when a We Make Indiana team member with expertise in environmental policy asked how Microsoft planned to recycle all decommissioned materials, Microsoft’s rep “did not have any answers to those questions,” Juskus said.

During an interview with a local radio station, a different Microsoft rep confirmed that the proposal was not on his radar, said Andre Stoner, a former pastor and peace activist who leads We Make Indiana. He is not optimistic that Microsoft will ever directly address their proposal.

“We have very little confidence that there’s been any robust conversation inside,” Stoner told Ars.

Nathan Taft, a senior campaigner for the nonprofit environmental advocacy group Stand.earth, has been working with We Make Indiana, as well as groups in other areas where Microsoft is building data centers. He told Ars that each community must negotiate its own deals to fulfill local needs but that the fair share agreement in Indiana offers one way to ensure that environmental safeguards and community investments continue over the long term.

Taft told Ars that communities are “specifically looking at Microsoft because, to be fair to them, they’ve been a big leader in the climate space and community benefit space. They’ve done a good job in the past, and we want them to be that leader again. But increasingly, there’s been a big gap between what Microsoft is saying and what Microsoft is actually doing in public spaces and in communities.”

At town hall meetings, Microsoft seems to rely on “diffusion techniques” to avoid answering residents’ questions transparently, Taft told Ars. Rather than host a single speaker or panel addressing all questions in the room, “we’ve seen in multiple different places, they’ll have five or six different reps scattered across a room, and people come up and talk in little clusters,” Taft said. “And they’ll be like, ‘That’s a good question. Let me write this on a sticky note and put it on the wall.’ And it seems very rote and kind of like they’re ticking a box. It doesn’t seem like they want to hear real dissent.”

“It seems like what’s most important to them is getting as much compute online as quickly as possible,” Taft said. “And the communities are an afterthought.”

Stoner thinks other communities should consider pressuring data center developers to enter fair share agreements. The Better Data Center Project provided key assistance to his group when crafting their proposal, he said.

A plan to get Microsoft to the table

Juskus worries that northern Indiana may be developing “a unique significance in Microsoft’s eyes” after the company recently broke ground on a second data center there.

“As I understand it, we’re in a data center sweet spot, with abundant land and water, state-level tax incentives, and our location at a junction point in the electrical power grids,” Juskus told Ars.

Stoner told Ars that We Make Indiana is working to convince local officials to back the fair share agreement, potentially by using a county economic development director’s plan to create a “tax increment financing” (TIF) district around the Microsoft site as leverage. Microsoft has not publicly supported the TIF, but locals believe the company would benefit from the additional incentives and worry that it could use the TIF to expand the site.

“We are exploring whether the TIF can be leverage with Microsoft, with a message like ‘No TIF without a Fair Share,’” Stoner told Ars.

Microsoft seems to think that We Make Indiana shouldn’t speak for the entire community. But Stoner told Ars that engaging decision-makers on issues affecting the wider community is what his group does. Developing the fair share agreement involved “many, many, many conversations with our community leaders, with people in our congregations, with our leaders, to think about what it is we’re asking for and how and why,” Stoner said.

Some group members oppose AI, while others are neutral, but We Make Indiana has already won at least one major battle since entering the fight. A rumored Meta data center was blocked after the group rallied hundreds to pressure officials to vote against it at a public meeting that lasted until 4 am. The fight with Microsoft is not about stopping the data center, which is set to begin construction this fall and could be operational by 2029. It’s about building it better, Stoner said.

“We want development that doesn’t threaten our environment and our electric bills and that invests in a decent way, a proportional way,” he said.

Microsoft may be underestimating We Make Indiana. Stoner said the group has been organizing since 2024, building on work from a 2018 group called Faith in Indiana and using its community connections to secure bipartisan support for policies it favors. The Microsoft fight is the first time that We Make Indiana has engaged a corporate partner, Stoner said, and if they refuse to listen, the group stands ready to “mobilize hundreds of people from faith communities.”

“Basically, this is a question of power: Do they need to talk to us or not?” Stoner said. “Or do they think they don’t need to?”

To Stoner, giving tax breaks to AI firms while cutting funding for buses and childcare amounts to elected officials taking from the poor to benefit the wealthiest corporations. In the long term, he hopes to put an end to sales tax exemptions in his state. But in the meantime, he wants the fair share agreement to “be one of the big issues that’s debated in this election this fall,” Stoner said.