US President Donald Trump said on Tuesday that his administration has ordered big tech companies to build their own power plants to power AI data centers.
The announcement, made during the president’s annual State of the Union address, is a move aimed at protecting American citizens from rising electricity bills amid the explosive expansion of artificial intelligence (AI) data centers and comes ahead of November’s midterm elections.
What Trump said
“Tonight, I’m pleased to announce that I’ve negotiated a new ratepayer protection commitment. You know what that is? We’re telling the major technology companies that they have an obligation to provide for their own energy needs,” Trump said in his SOTU speech.
Explaining that the current U.S. power grid is unable to meet the demands of AI data centers, Trump said his administration’s latest directive will ensure that firms continue to develop AI without raising the cost of electricity for other consumers.
“We have an old grid. It could never handle the numbers, the amount of electricity that’s needed. So I say to them, they can build their own power plant. They’re going to generate their own electricity. It’s going to ensure the company’s ability to get electricity and it’s going to lower electricity prices for you,” the US president said.
What we know about the directive
Although Trump mentioned “major technology companies,” he did not name any during his SOTU speech, which was the longest in US history.
The US president also did not say how his administration plans to implement measures to keep electricity bills under control.
But Reuters, citing people familiar with the matter, said the White House would host several companies in early March to formalize the effort.
It remains unclear which companies have been invited to attend.
Data centers and electricity costs
The rapid expansion of U.S. data centers amid Washington’s bid to beat China in the artificial intelligence race has raised concerns about rising electricity prices — a potential vulnerability for Republicans in the upcoming November midterm elections, given already existing concerns about the rising cost of living in the U.S.
Although Trump promised in the 2024 campaign to cut electricity prices in half within 18 months of taking office, Americans’ electricity bills have instead risen, far outstripping the pace of overall inflation, according to Bloomberg.
Increasing energy demands and their impact on the American grid have also been noted by companies recently.
Last month, the largest U.S. grid operator, PJM Interconnection, unveiled a plan to address AI data center needs that requires large electricity users to feed their own power generation into the grid or curtail its use when the system is stretched, according to a Reuters report.
The news agency also reported that artificial intelligence companies such as Anthropic and technology companies such as Microsoft have also announced voluntary plans to limit the impact of data centers on ordinary citizens’ electricity bills.
(With input from agencies)
