What just happened? In addition to driving up the price of DRAM and other PC components, another reason AI data centers are getting a lot of hate is their negative effect on electricity prices. But President Donald Trump says that his administration is working with major US tech companies to ensure Americans don't "pick up the tab."
In a post on his Truth Social account, Trump wrote that he never wants Americans to pay higher electricity bills because of data centers. As such, the tech giants that build them must "pay their way."
The post goes on to state that the first company the administration is working with is Microsoft. Trump says the Redmond firm will make major changes beginning this week.
"We are the "HOTTEST" Country in the World, and Number One in AI. Data Centers are key to that boom and keeping Americans FREE and SECURE but the big Technology Companies who build them must "pay their own way." Thank you, and congratulations to Microsoft," he added.
Microsoft has not responded to requests for comment on Trump's post. However, President and Vice Chairman Brad Smith is scheduled to make an announcement at an event in Washington later today (January 13), when he may speak about the proposal.
In a statement announcing the event, Microsoft said that as America enters a new era of opportunity shaped by the power of AI, there are fundamental questions being raised, including who should bear the cost of critical AI infrastructure.
Surging electricity prices are one of many reasons why most people don't share the same love for generative AI as the CEOs invested in the industry – something Nvidia's Jensen Huang recently complained about.
US power prices have risen faster than the rate of inflation as the cost of living keeps increasing. In December, three senators sent letters to Amazon, Google, Meta, Microsoft, Equinix, Digital Realty, and CoreWeave, raising concerns that data center growth has coincided with dramatic increases in local utility rates. They cited a study finding that electricity prices have risen by as much as 267% over the past five years in areas located near significant data center activity.
According to the letters, power prices often surge when utilities build new infrastructure to meet the massive, sustained electricity loads demanded by data centers, which in some regions "consume as much power as an entire city."
In October, Microsoft canceled plans to build a data center in Caledonia, Wisconsin, after residents and elected officials objected. While the reasons for these objections were not listed, increased electricity bills and a reduction in power quality in the area were doubtlessly major factors. The Wisconsin location was one of at least 25 data center projects canceled in the US last year.