Donald Trump is worried about datacenters. Specifically, he is concerned about their effects on an already expensive electricity market in the United States. Will Americans’ resentment of sharply rising energy costs scuttle his party’s November election ambitions?
The US president’s anxiety is evident in two actions in recent weeks. On 13 January, Trump and Microsoft’s president jointly announced that the tech giant would pay more for its datacenters, paying full property taxes and accepting neither tax reductions nor electricity rate discounts in towns where it operates datacenters.
“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.’” Trump wrote on Truth Social. “Thank you, and congratulations to Microsoft.”
On 16 January, Trump and governors of states in the north-east US directed the country’s largest power grid operator to hold an emergency reliability power auction by September, per Bloomberg. The move could force tech giants to pay for the construction of new power plants by requiring them to bid on the future reliability of the electricity they plan to draw from the grid.
“I never want Americans to pay higher Electricity bills because of Data Centers,” Trump said.
OpenAI followed Microsoft’s lead with an announcement on 20 January. The company committed to “paying our own way on energy, so that our operations don’t increase your electricity prices”. The company is part of the Stargate collaboration between the AI industry and the Trump administration to invest $500bn in AI infrastructure.
Trump is tugging at the edges of the problem of rapidly rising electricity demand. He promised Americans he’d slash their electricity bills by half. But as the Guardian reported just after Trump and Microsoft made their joint proclamation, there’s little prospect of him delivering on that vow. At the same time that AI is increasing the demand for electricity, the administration is blocking renewable energy projects Trump calls a “scam” and a “con job” but were set to provide electricity for millions of US homes, instead pushing the expansion of drilling for gas and oil. Administration edicts to reverse the closure of ageing coal plants and to restart the overseas export of liquified natural gas could counterintuitively raise costs further for domestic consumers.
Power prices play into larger concerns about the cost of living in the US, an issue that has Trump’s party on its back foot as congressional elections loom in November.
As ever with technology news, Elon Musk is part of the story. On 15 January, the US Environmental Protection Agency (EPA) ruled that Musk’s company xAI had illegally been operating methane-powered generators at its Memphis facility. The ruling establishes a precedent for tech companies in search of more electricity than…
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