Donald Trump said he is partnering with tech companies to ensure that the large, energy-guzzling data centers essential to AI don’t drive up U.S. electricity bills. On Tuesday, the US President announced that Microsoft is “first mover”.
“We are the ‘hottest’ country in the world and number one in AI. Data centers are key to that boom and keep Americans free and safe, but the big tech companies that build them ‘must pay for themselves,'” Trump wrote on Truth Social. “Thank you Microsoft and congratulations.”
Microsoft President Brad Smith outlined the company’s plans at an event called “Community First AI Infrastructure” held near the White House on Tuesday. He said the initiative is aimed at minimizing water use and ensuring that Microsoft’s electricity usage does not add up to personal utility bills. He said that in towns where Microsoft has data centers, the company pays property taxes and does not receive tax breaks or electricity discounts.
“As with any large-scale ramp-up in the past, AI infrastructure is expensive and complex,” Smith wrote in a blog post on Tuesday. “This reignites a long-standing question: How can our nation build transformative infrastructure in a way that strengthens, rather than strains, the communities in which it is embedded?”
President Trump embraced AI during his second term, hosting tech CEOs at the White House and Mar-a-Lago. He signed an executive order to deregulate AI, foster innovation, and ease environmental regulations to expedite federal permitting for data centers. But as concerns about affordability and a backlash against data centers ripple across the country, President Trump appears to be adjusting his stance.
President Trump said he is launching a power bill reduction plan with Microsoft and is working with other big tech companies to make similar commitments.
As data centers are rapidly being built across the country, local communities are protesting the projects, saying the facilities are raising electricity bills, depleting water resources and polluting neighborhoods. This anger is bipartisan, spreading from red states like Oklahoma, Tennessee and Louisiana to blue states like Oregon, California and New York. In rural Wisconsin, Microsoft has canceled plans for a new data center after community opposition, including concerns about rising power prices.
Data centers consume large amounts of electricity and water, and AI facilities are especially energy-intensive. One large data center uses as much electricity as a small city and consumes up to 1 million gallons of water per day. The International Energy Agency estimates that total electricity from data centers around the world could double by 2026 from 2022 levels. This is roughly equivalent to the amount of electricity used by all of Japan in a year.
Microsoft has increased its carbon footprint by 23% since 2020 due to the increase in AI data centers. Other tech companies, including Google, Amazon, and Meta, have also seen their emissions increase significantly due to the AI boom.
