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The announcement, made during the President's annual State of the Union address, is a move aimed to protect American citizens from rising power bills amid an explosive expansion of data centres for artificial intelligence (AI) development, and comes ahead of the midterm elections in November.
US President Donald Trump on Tuesday said that his administration had directed major tech companies to build their own power plants to power AI data centres.
The announcement, made during the President's annual State of the Union address, is a move aimed to protect American citizens from rising power bills amid an explosive expansion of data centres for artificial intelligence (AI) development, and comes ahead of the midterm elections in November.
What Trump said
"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," Trump said in his SOTU speech.
Explaining that the current energy grid in the US was incapable of handling the demands of AI data centres, Trump said that his administration's latest directive would ensure firms continue to develop AI without raising electricity costs for other consumers.
"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," the US President said.
What we know about the directive
Although Trump mentioned "major tech companies", he did not name any during his SOTU speech, which was the lengthiest in US history.
Neither did the US President detail how his administration planned to implement the measure to keep electricity bills in check.
However, Reuters, citing people familiar with the matter, reported that the White House would host several companies in early March in a bid to formalize the effort.
It remains unclear which companies have been called for talks.
Data centres and electricity costs
The rapid proliferation of data centres in the US amid Washington's efforts to beat China in the AI race has raised concerns about rising electricity prices— a potential vulnerability for Republicans in the upcoming midterm elections in November, given already extant worries about growing costs of living in the US.
Although Trump vowed on the 2024 campaign trail that he would cut electricity prices in half within 18 months of taking office, power bills of Americans have instead gone up, climbing well above the pace of overall inflation, as per Bloomberg.
Growing energy demands and their impact on the US grid has also been noted by companies of late.
Last month, the largest grid operator in the US—PJM Interconnection—unveiled a plan to tackle the needs of AI data centres, which requires large electricity users to bring their own power generation to the grid or limit their usage when the system is stretched, as per a report by Reuters.
The news agency also reported that AI firms such as Anthropic and tech majors like Microsoft have also announced voluntary plans to limit the impact of data centres on power bills of regular citizens.
(With inputs from agencies)
English (US) ·