The proliferation of AI data centers connected to the national power grid is driving up electricity prices for consumers, with the national average electricity price rising more than 6% last year.
This doesn’t bode well for incumbents facing elections this fall, and President Donald Trump addressed the challenge in last night’s State of the Union address.
“We’re telling big tech companies that they have an obligation to meet their own electricity needs,” Trump said. “They can build their own power plants as part of the factory, so prices don’t go up for anyone.”
The hyperscaler in question needs no introduction. They have already pledged in recent weeks to cover their power costs by building their own power sources, paying higher rates, or both, as part of a broader effort to resolve PR issues around data center expansions and gain support from a skeptical community.
On January 11, Microsoft announced a policy to “ensure that electricity costs used to service data centers are not passed on to residential customers.” On January 26, OpenAI pledged to “pay our own energy bills to ensure that our operations do not increase energy prices.” On February 11th, Anthropic made a similar pledge: “Our data centers will cover the electricity bill increases that consumers face.” Yesterday, Google announced the world’s largest battery project to support a data center in Minnesota.
It remains unclear what these promises actually mean and who will decide which data centers are responsible for which price increases. The White House has not released the text of the proposed pledge.
“A handshake deal with Big Tech over data center costs is not enough,” Sen. Mark Kelly, D-Ariz., said on social media. “Americans need assurance that energy prices will not skyrocket and that communities will have a voice.”
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White House Press Secretary Taylor Rogers said the companies will send representatives to formally sign the pledge at the White House next week. Amazon, Google, Meta, Microsoft, xAI, Oracle, and OpenAI are reportedly scheduled to participate. However, none of the companies have confirmed their attendance.
Even if tech companies promise to pay for your electricity bills, on-site power plants may not be a panacea. Depending on how companies aim to enhance computing, they could still have a negative impact on the surrounding environment, putting stress on supply chains for natural gas, turbines, solar power, and batteries.
