ANN ARBOR – Michigan’s fast-growing data-center market is colliding with a hard physical limit: electricity that never blinks.

Developers chasing hyperscale campuses—built to train and run artificial intelligence models—are demanding round-the-clock power at levels that can rival a mid-size city. Utilities and regulators, meanwhile, are trying to keep rates stable for households while meeting Michigan’s new clean-energy requirements.

Into that tension comes a headline-grabbing idea now circulating nationally: repurposing retired U.S. Navy nuclear reactors—the kind used on aircraft carriers and submarines—to supply steady, carbon-free power for AI data centers.

The proposal, reported by Tom’s Hardware, comes from a Texas-based developer asking the U.S. Department of Energy for a loan guarantee to jump-start a project that would refurbish decommissioned naval reactors and redeploy them as stationary power plants for the grid—potentially serving the booming AI infrastructure economy.

No one is planning to drop an aircraft-carrier reactor into rural Washtenaw County tomorrow. But the very fact that “recycled Navy nuclear” is being pitched as a solution tells you how big—and how urgent—the data-center power problem has become. In Michigan, that urgency is no longer theoretical.

The Michigan problem: gigawatts, not megawatts

The center of gravity is shifting toward Southeast Michigan. In Saline Township, regulators recently approved DTE Energy’s request to provide 1.4 gigawatts of power to a planned data center tied to OpenAI and Oracle’s “Stargate” effort—an eye-popping number that has intensified local backlash and renewed scrutiny of how such decisions are made.

On the corporate side, DTE has characterized its first major data-center agreement as a step-change opportunity, pointing to a potential pipeline measured in multiple gigawatts and tens of billions in investment.

And Saline isn’t alone. In Van Buren Township, a separate proposal pitched as a 1-gigawatt project has sparked its own community debate—this time raising questions about water use, land use, and how much information local officials can disclose during negotiations.

Meanwhile, Oakland County is emerging as another flashpoint. Reports in December described a large hyperscale proposal in Lyon Township tied to a developer backed by Alphabet—another signal that Michigan’s data-center buildout is spreading beyond a single marquee project.

Why nuclear keeps coming up—especially for AI

Data centers can buy renewable energy credits, sign wind and solar contracts, and build storage. But AI-era computing loads have a brutal profile: they’re large, continuous, and sensitive to interruptions. That’s why energy planners keep returning to “firm” power sources that can run 24/7—nuclear among them.

Michigan has also set a legal destination point that narrows options. The state’s clean-energy laws establish a 100% clean energy standard by 2040, with interim benchmarks along the way, and Michigan’s Public Service Commission is already in implementation mode.

That puts utilities in a squeeze: serve enormous new loads quickly, do it with reliability, and still move toward a cleaner grid. For big customers, the appeal of nuclear is simple: it’s steady, carbon-free, and scalable—at least in theory.

Palisades: Michigan’s real nuclear lever (not a carrier reactor)

If nuclear becomes a serious part of Michigan’s data-center power story, it’s more likely to start with Palisades than with surplus Navy hardware.

The Palisades nuclear plant on Lake Michigan is on a high-profile path toward a restart under Holtec, backed by federal financing support. Reuters has reported DOE loan disbursements tied to the recommissioning effort, with the project aiming to bring the plant back online after its 2022 shutdown.

For data-center developers and utilities, Palisades represents something rare in modern U.S. energy: the possibility of adding a large block of carbon-free baseload power without building a brand-new traditional nuclear plant from scratch.

Still, even the Palisades restart comes with engineering, regulatory, and timeline risk—and it doesn’t solve the local politics that are now attached to data-center growth in Michigan.

“Recycled Navy reactors”: what it signals—and what it would face

The Navy-reactor concept, as described in national coverage, is framed as a faster, cheaper route to nuclear power than conventional projects because the core technology already exists and has a long operating history.

But moving a military reactor into civilian use would be a first-of-its-kind step with layers of friction: federal oversight, security protocols, licensing requirements, waste-handling rules, and community acceptance. In Michigan—where even transmission lines and new substations routinely trigger years of local dispute—those hurdles would be steep.

So why does it matter? Because it reveals where the conversation is heading. As AI data centers scale up, America’s grid is being asked to do something it hasn’t done in decades: rapidly add massive amounts of firm power—not just energy, but capacity—while keeping emissions low.

Michigan, with its clean-energy mandate and its suddenly hot data-center market, is becoming a vivid case study.

The local flashpoints: water, transparency, and who pays

In Saline Township, opponents have raised concerns ranging from water impacts to transparency in the regulatory process.

In Van Buren Township, reporting described questions about nondisclosure agreements and projected water use for cooling—concerns that are increasingly common wherever hyperscale campuses are proposed.

Even when utilities argue that contracts are structured to protect other customers—through minimum payments and long-term commitments—residents often remain skeptical, especially when projects move quickly or appear to bypass traditional public airing.

What Michigan’s next year may look like

Expect three tracks to run in parallel:

  1. More data-center proposals, especially near major transmission corridors and existing industrial footprints.

  2. More controversy, particularly around water usage, zoning, and “who benefits” in host communities.

  3. More serious nuclear talk, driven less by ideology than by the physics of 24/7 computing and the legal pressure of clean-energy targets.

Whether the state ends up leaning on restarted nuclear capacity, new small modular reactors in the long run, or a blend of gas-plus-storage-plus-renewables, the direction is clear: Michigan’s AI boom is becoming an energy story as much as a tech story.

And while “retired Navy reactors powering data centers” may sound like science fiction, it’s best understood as a flare: a sign that the market is searching—aggressively—for clean, firm power at a scale Michigan is only beginning to confront.