The rapid expansion of AI data centers connecting to the national electrical grid has contributed to rising consumer electricity prices. Over the last year, this has driven the average national electricity price up by more than six percent. This trend presents a political challenge for incumbents ahead of the fall elections. President Donald Trump addressed the issue in his recent State of the Union speech, stating that major tech companies have an obligation to provide for their own power needs. He suggested they build their own power plants as part of their facilities to prevent anyone’s prices from increasing.
The major technology companies, known as hyperscalers, do not need to be instructed. They have already made public commitments in recent weeks to cover electricity costs by building their own power sources, paying higher rates, or both. This is part of a broader effort to address public relations concerns around data center expansion and gain the support of skeptical communities.
On January 11, Microsoft announced a policy to ensure that the electricity cost of serving its data centers is not passed on to residential customers. On January 26, OpenAI committed to paying its own way on energy so that its operations do not increase energy prices for others. On February 11, Anthropic made a similar pledge to cover electricity price increases that consumers face from its data centers. Most recently, Google announced the largest battery project in the world to support a data center in Minnesota.
What these commitments mean in practice, and who will determine which data centers are responsible for which price increases, remains unclear. The White House did not respond to questions about the policy. Arizona Democratic Senator Mark Kelly expressed skepticism on social media, stating that a handshake agreement with Big Tech over data center costs is not sufficient. He argued Americans need a guarantee that energy prices will not soar and that communities have a say in the process.
A White House spokesperson stated that next week, companies will send representatives to formally sign the pledge at the White House. Amazon, Google, Meta, Microsoft, xAI, Oracle, and OpenAI are reportedly among those set to attend, though none of the companies have confirmed their participation.
Even if tech companies commit to taking on electricity costs, on-site power plants may not be a perfect solution. They can still have adverse impacts on the surrounding environment and will stress supply chains for natural gas, turbines, photovoltaics, and batteries, depending on how companies choose to power their computing operations.