US President Donald Trump on Wednesday called on data center companies to “make deals” with local communities to secure support for expensive facilities.
President Trump said data center operators should pay “dividends” to communities and individuals within them to make data centers more popular.
In a post on Truth Social, the president said, “I’ve been following the process closely, and data centers that went from being very unpopular in certain regions to becoming very popular once the financial deal was made. Let’s make the deal and get it built!!! Great for America.”
Data centers have become a hot topic of debate ahead of the midterm elections in November. Public opposition to the construction of the facility and its environmental impact is growing, with several states considering a moratorium on construction.
Data center stocks have also come under pressure this week amid growing concerns about the sector’s financial health. As the cost of building AI infrastructure increases, companies are increasingly turning to the debt markets to fund their transactions.
HSBC CEO Georges Elhedery advised investors to be more discerning than an all-in approach when it comes to investing in infrastructure to support technology.
“We have to be selective,” Elhederi told CNBC’s Dan Murphy on Tuesday. “You need to consider the quality of your tenancy agreements. You also need to consider the pricing of these agreements. Not all agreements are at a good enough level to be strongly supported. Some may be more difficult.”
Many of the concerns center on water usage, power consumption, electricity costs, and the enormous amount of space some centers require. Access to electricity is a major constraint in this sector, as power grids in the United States and Europe are overwhelmed with applications from large energy users such as data centers.
President Trump, a longtime supporter of data centers, said Wednesday that he is monitoring them “very closely” and has now reached “very strong conclusions.”
“New, large, and in some cases huge, data entry companies are being required by me to generate their own electricity and transfer or sell their excess back to the community or to the grid. That’s going to drive up the price of electricity. In fact, it could go down significantly,” Trump said.
