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Donald Trump said he is partnering with tech companies to ensure the large energy-hungry datacenters vital for AI do not drive up electricity bills in the US. On Tuesday, the US president announced that Microsoft was “first up”.
“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.”
Brad Smith, Microsoft’s president, outlined the company’s plan at an event on Tuesday near the White House titled Community-First AI Infrastructure. He said the initiative aimed to minimize water use and ensure that Microsoft’s electricity usage does not add to individuals’ utility rates. In towns where Microsoft has datacenters, he said, the company would pay its property taxes and accept neither tax reductions nor electricity rate discounts.
“Like major buildouts of the past, AI infrastructure is expensive and complex,” Smith wrote in a blogpost on Tuesday. “This revives a longstanding question: how can our nation build transformative infrastructure in a way that strengthens, rather than strains, the local communities where it takes root?”
Trump has embraced AI during his second term in office, hosting tech CEOs at the White House and Mar-a-Lago. He has signed executive orders to deregulate AI, hasten innovation and ease environmental rules to expedite federal permitting for datacenters. But as concern over affordability and backlash against datacenters have rippled across the country, Trump seems to be modifying his stance.
Trump said he was starting his electricity bill reduction plan with Microsoft but that he was also working with other major tech companies to make similar pledges.
As datacenters have rapidly cropped up across the country, local communities have protested against the projects, saying the facilities are raising electricity costs, draining water resources and polluting neighborhoods. The outrage is bipartisan – stretching from red states such as Oklahoma, Tennessee and Louisiana to blue ones such as Oregon, California and New York. In rural Wisconsin, Microsoft scrapped plans for a new datacenter after community opposition that included concern over a surge in electricity rates.
Datacenters consume vast amounts of power and water, and those facilities geared toward AI are especially intensive. One large-scale datacenter can use the same amount of electricity as a small city and consume as much as a million gallons of water per day. The International Energy Agency estimates total electricity from data centers worldwide could double through 2026 from 2022 levels – roughly equaling what is used by the entire country of Japan per year.
Microsoft has seen its carbon emissions grow by 23% since 2020 because of the multiplying of its AI datacenters. Other tech companies, including Google, Amazon and Meta, have also seen considerable increases in their emissions due to the boom in AI.
