President Donald Trump announced on Monday that his administration is working with major U.S. tech companies, particularly Microsoft Corporation (NASDAQ:MSFT), to prevent Americans from bearing the brunt of data center power consumption.
Through a Truth Social post, Trump said: “I never want Americans to pay higher electricity bills because of data centers.”
He highlighted that the U.S is “Number One” in AI and that data centers are key to the AI boom, but emphasized that the tech companies must “pay their own way.”
Trump indicated “major changes” to be announced beginning this week to ensure that Americans don’t “pick up the tab” for the power consumption by these data centers.
Microsoft did not immediately respond to Benzinga‘s request for comment.
Data Centers Strain Grid, Boost Gas
The increase in utility bills has been a growing concern, particularly due to the rising power consumption of data centers. A recent report by BloombergNEF (BNEF) indicated that the U.S. could face mounting reliability risks as electricity demand from data centers climbs far faster than grid capacity. Despite record grid spending, the investment remains insufficient to ease transmission bottlenecks.
U.S. data center power use is expected to nearly triple to 12% of total electricity by 2028 from 4.4% in 2023, according to the Energy Department, with nearby consumers facing sharp rate hikes, up to 267% over the past five years, a Bloomberg analysis found.
Meanwhile, the issue of data center power consumption has also been linked to a natural gas supercycle, as highlighted in a report by the IEA. The soaring power demand from data centers is pushing the U.S. back toward natural gas, effectively nudging fossil fuels back into the driver’s seat.
Microsoft’s Europe Energy Push, US Backlash
Trump’s announcement of working with major American tech companies to address the issue aligns with the recent initiatives taken by Microsoft, which recently announced a partnership with Iberdrola to expand its collaboration on energy and artificial intelligence projects. This includes two long-term power purchase agreements in Spain, marking the first such agreements Microsoft has signed in Europe.
Microsoft is also facing local pushback on its $1 billion data center project in a Michigan township amid concerns of swift rezoning of the land and energy demands of the facility.
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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