U.S. President Donald Trump has said that major technology companies developing artificial intelligence data centers will have to cover their electricity needs under what he called a newly negotiated “rate protection pledge.”
Speaking during his State of the Union address to Congress, Trump said tech firms would be told to generate dedicated power for their expanding AI infrastructure rather than drawing additional load from local grids.
“Tonight, I’m pleased to announce that I have negotiated the new rate payer protection pledge. You know what that is? We’re telling the major tech companies that they have the obligation to provide for their own power needs,” he said.
“We have an old grid. It could never handle the kind of numbers, the amount of electricity that’s needed. So I’m telling them, they can build their own plant. They’re going to produce their own electricity. It will ensure the company’s ability to get electricity while, at the same time, lowering prices of electricity for you,” he said.
He did not name the companies involved or provide details on how the plan would be implemented or enforced. Reuters reported that the White House is expected to host companies in early March to formalize the effort.
Last month, Microsoft (MSFT) unveiled a plan to ensure their data centers don’t increase consumers’ electricity prices and minimize water use and replenish more of the water than they use, as Trump weighed potential action on electricity costs.
Wedbush has said it expects other big tech organizations to follow soon after, given the increased scrutiny from federal, state, and local governments to address major concerns with large-scale data center buildouts.
The Trump administration in January unveiled a plan that would require big tech companies to pay for the construction of new power generation in the region managed by PJM Interconnection, the largest U.S. grid operator, serving 67M customers in 13 states and Washington, D.C.
PJM also announced its plan, which called for big data centers to voluntarily bring their own new generation or face the potential of having their power supply curtailed during peak demand periods.