Wedbush (IVES) said that a pledge signed by Big Tech with the Trump administration aimed at covering increased electricity costs creates a significant bottleneck and could slow down the buildout of large data centers quickly.
Analysts led by Dan Ives said that the Trump Administration held a meeting at the White House with companies including Amazon (AMZN), Alphabet’s (GOOG) (GOOGL) Google, Meta Platforms (META), Microsoft (MSFT), xAI (X.AI), OpenAI (OPENAI), and Oracle (ORCL), where the companies signed the Ratepayer Protection Pledge.
The White House said on Wednesday that under the Ratepayer Protection Pledge, companies agree to protect American consumers from price hikes due to data center energy and infrastructure requirements and lower electricity costs for consumers in the long term.
This includes: building, bringing, or buying a new power supply; paying for new power delivery infrastructure upgrades; paying whether they use the power or not; investing in local job creation and workforce development; and contributing to electric and community resilience.
“President Trump is calling on the leading United States hyperscalers and AI companies to build, bring, or buy all of the energy needed for building and operating data centers, paying the full cost of their energy and infrastructure, no matter what, said the White House on Wednesday.
“While this initiative alleviates a major headache from the Trump administration heading into a critical mid-term election cycle, this creates a significant bottleneck with big tech organizations looking to build out large data center footprints quickly and without impacting the bottom-line potentially slowing down data center buildouts with the US entering a crucial time of the AI Revolution as the US faces significant energy shortages/issues to fuel data center buildouts,” said Ives and his team.
The analysts added that while the Trump administration has embraced the AI Revolution with open arms as a key pillar of economic growth and a pillar of national security, the cost of living has been incrementally on the rise. Residential prices are growing 7% year-over-year on average nationwide in 2025, with these prices previously expected to rise 6% year-over-year through 2027 as data center demand grows more rapidly than power supply, according to the analysts.
Ives and his team said that many communities have rejected the premise of data centers being built across their towns. This is because of the rising costs being passed onto American households to finance these long-term projects while strengthening the grid with these organizations building their own electricity capacity.