Microsoft Breaks Ground on First Self-Operated Data Center Campus in San Jose, California
June 12, 2026
Microsoft Breaks Ground on First Self-Operated Data Center Campus in San Jose, California
Microsoft has officially broken ground on its Alviso data center campus in San Jose, California, marking the company’s first self-owned and operated data center in the city. The initial phase of the project is designed to deliver 48 megawatts (MW) of capacity, with completion expected in 2028. The development underscores Microsoft’s growing commitment to owning and managing its own infrastructure in key metropolitan markets, a shift from relying solely on leased facilities.
The project is expected to generate approximately 600 construction jobs during the build phase and sustain around 100 permanent operational roles once the campus becomes active. HITT Contracting has been appointed as the general contractor for the facility. “This campus marks another milestone in building the infrastructure behind today’s digital economy,” said Trevor Coffey, executive vice president at HITT Contracting. “With our partners at Microsoft, we’re delivering a complex, mission-critical project that will support technological growth and create lasting investment and opportunity for the San Jose community.”
The campus is located at 1657 Alviso-Milpitas Road, on a 64-acre site that Microsoft acquired in 2017 for $73.2 million. The company originally planned to develop two data center buildings on the property, and planning permission was granted in April 2025. Before construction, the site had been used as a homeless encampment, with occupants reportedly asked to vacate in April 2024. Microsoft’s senior director of Infrastructure government affairs, Jonathan Noble, emphasized the broader community impact of the project. “These projects extend beyond physical infrastructure; they reflect long-term partnerships with communities that support and help shape them,” Noble said. “Through ongoing investment, collaboration, and engagement, we are committed to contributing positively to the regions where we operate.”
The Alviso campus is one of two data center sites Microsoft has under development in San Jose. In 2022, the company announced plans to build on a 22-acre land parcel near the intersection of Orchard Parkway and Component Drive, which it purchased for $78 million in May 2021. Microsoft currently operates its West US region from California, though the region does not yet offer availability zone support. Earlier this year, the region experienced a power interruption that impacted service availability, highlighting the need for continued investment in resilient infrastructure.
The construction of self-operated campuses like Alviso represents a strategic shift for hyperscale cloud providers, allowing them greater control over power, cooling, and security while reducing long-term operational costs. For San Jose, the project signals a significant infusion of tech-driven economic activity and underscores the city’s role as a critical hub for cloud infrastructure in the western United States.
Source: datacenterdynamics
