Trump announces Big Tech must build own power plants to shield consumers from AI electricity costs

White House to host Big Tech in pledge to rein in power costs

Feb 25 (REUTERS) - The White House plans to host leading data center and artificial intelligence companies including Microsoft (MSFT.O), opens new tab, Anthropic and Meta Platforms (META.O), opens new tab in early March to formalize a deal to shield consumers from rising electricity costs, according to two sources familiar with the plans. The meeting is expected to advance an initiative President Donald Trump unveiled during his State of the Union address on Tuesday, in which he said he had told major technology firms they must build their own power plants to run the rapidly-expanding fleet of data centers and other artificial intelligence infrastructure. The pledge under discussion is expected to resemble commitments already offered earlier this year by Microsoft (MSFT.O), opens new tab to invest in new electricity generation and efficiency measures, the sources said. "We appreciate the Administration's work to ensure that data centers don't contribute to higher electricity prices for consumers," said Brad Smith, Microsoft's Vice Chair and President. The company did not say whether it would be in attendance next week or whether it would sign any new pledge. The White House did not immediately respond to requests for comment. A spokesperson for Meta declined to comment and Anthropic did not immediately respond to a request for comment. Trump has made the global AI race, and securing the vast amounts of electricity needed to power it, a primary focus of his second term. That agenda, however, has become politically precarious ahead of the midterms as energy demand growth from data centers pushes up power bills over a wide swath of the country. The recent proliferation of giant data center projects -- needed for the expansion of artificial intelligence technologies -- has been met with increasing local and state protests over concerns of rising bills and pollution tied to the developments. Reporting by Laila Kearney and Jarrett Renshaw; editing by Timothy Gardner Our Standards: The Thomson Reuters Trust Principles., opens new tab

Trump Says Tech Firms Should Pay More for Electricity

In a nod to voter frustration over rising electricity prices, President Trump on Tuesday said he was negotiating pledges from major tech companies to pay a greater share of the energy costs associated with new data centers. Silicon Valley is spending hundreds of billions of dollars to build power-hungry data centers for artificial intelligence as demand for electricity is increasing across the United States. That has led to widespread fears that the A.I. boom could cause utility bills to spike for ordinary households. Mr. Trump's announcement during his State of the Union speech was light on details, and experts said that any promises by tech companies to pay more for their electricity could be difficult to verify or enforce in practice. Yet the move underscored the extent to which White House officials and Republicans have worried that rising electricity prices could hurt them in the midterm elections this year. "We're telling the major tech companies they have the obligation to provide for their own power needs and can build their own power plants so no one's prices will go up," Mr. Trump said. He called it a "ratepayer protection pledge." Data centers being built today can use as much power as a small city, and they often require large new transmission lines, power plants and other costly upgrades before they can be connected to the local electric grid. Historically, utilities have spread those upgrade costs -- which can reach billions of dollars -- among all customers in their regions. But politicians are increasingly calling on tech giants to foot most or all of the bill for these upgrades. In recent weeks, both Microsoft and Anthropic have publicly pledged to pay higher electricity rates to cover their costs. Many tech companies are also building their own power plants, largely fueled by natural gas, as Meta is doing with a data center in El Paso, Tex. "We absolutely want to pay our fair share of all costs associated with serving us," Briana Kobor, head of energy market innovation at Google, told a recent gathering of utility regulators in Washington. Experts say that such pledges could potentially help curb electricity costs for everyone else but the effects would depend on the specifics of the plan. "If you could wave a magic wand and have tech companies pay for every nickel that's being spent on infrastructure, that would have a significant effect," said Ari Peskoe, who directs the Electricity Law Initiative at Harvard University. "But it gets complicated in practice," he said. "There are a lot of big question marks here." It can be difficult to figure out which expenses should be assigned to new data centers, such as the cost of upgrading transmission lines. The contracts that data centers sign with local utilities are typically confidential, which can make it hard for the public to verify whether tech companies are paying all of their associated costs. In some parts of the country, regional grid operators and regulators may also need to rewrite complex rules on how to allocate their costs. Trump Administration: Live Updates Updated Feb. 25, 2026, 8:02 a.m. ET It is also unclear whether any pledges from the major tech giants would apply to the smaller third-party developers that are often the ones building data centers and negotiating power contracts. The White House did not respond to questions about the pledge or which tech companies had signed it. On a call with reporters Wednesday, Energy Secretary Chris Wright said, "Every name you know that's developing a data center has been in dialogue with us." Josh Levi, the president of the Data Center Coalition, a trade association, said in a statement that tech companies plan to "work closely" with the administration on the issue. "We appreciate President Trump's focus on winning the global A.I. race, and we share his commitment to the continued responsible development of the data center industry, alongside a more affordable, reliable electric grid that serves all customers," he said. The Energy Department also announced Wednesday morning that it would loan $26.5 billion to two electric utilities, Georgia Power and Alabama Power, to help build new gas plants and batteries and upgrade nuclear plants and transmission lines. The loan would allow the utilities to reduce their borrowing costs by about $300 million per year, officials said, and allow Georgia Power to enact a three-year rate freeze at a time when data centers are expanding rapidly in the region. Last month, the Trump administration also floated a plan to try to ease the rapid price increases occurring in PJM Interconnection, a regional grid that serves 65 million people in the Mid-Atlantic. That proposal, which would require significant regulatory changes and is still under review by the grid operator, would have tech companies pay to build new power plants in the region through specialized 15-year contracts. But that plan could take years to have an effect, experts said. That's because, in the short term, data centers can come online and drive up electricity demand faster than new power plants can be built. Rising electricity rates have become a volatile political issue in many parts of the country. Over the past six years, the average retail price of electricity has risen faster than inflation in roughly two dozen states. Some tech firms, electric utilities and Trump administration officials have disputed the idea that data centers are to blame. In Virginia, home to the nation's largest concentrations of data centers, electricity prices have mostly stayed flat over the past six years after adjusting for inflation. Some analyses have suggested that new data centers can even lower prices by allowing utilities to spread the fixed costs of maintaining the grid among a larger set of customers. Yet the new pledges suggest that the big data center companies, known as "hyperscalers," are scrambling to avoid a backlash. At least 25 proposed data centers were canceled last year after protests by nearby communities, according to research by Heatmap, a climate news site. "The rhetoric from hyperscalers has changed over the past year," Mr. Peskoe said. "A year ago, they were saying that they were already paying their fair share. Now they seem to be acknowledging that they need to do better." Mr. Trump had originally promised that he would cut electricity bills in half within 18 months of taking office. While he almost certainly won't come close to meeting that pledge, he again promised in his Tuesday address that energy costs would fall. "Soon you will see numbers that few people would think were possible to achieve just a short time ago," he said. "Nobody can believe when they see energy going down to numbers like that."

Trump's pact with Big Tech on utility prices is short on details

At Tuesday's State of the Union, President Donald Trump announced that he had struck an agreement. "I'm pleased to announce that I have negotiated the new rate payer protection pledge," Trump said in the record-breaking 107-minute speech. "We're telling the major tech companies that they have the obligation to provide for their own power needs, so that no one's prices go up." He added that an antiquated power grid risked getting strained due to the surging demand for electricity from data centers. The pledge, though, was short on details. It was not immediately clear which tech companies agreed to the conditions, the timeline for the agreement to kick in, or what amount in savings Americans could expect. The White House did not immediately respond to a request for comment. The Wall Street Journal reported Trump is expected to convene tech executives in early March to formalize the initiative. Some major tech companies like Microsoft $MSFT and Anthropic are taking steps to finance their own power generation so Americans don't get stuck with the bill from new data centers. Power bills have climbed in many parts of the U.S. because of increased utility demand from tech firms spending big on AI, and the president appears intent to head off possible AI-related backlash in the midterms. The four tech giants Amazon $AMZN, Microsoft, Meta $META, and Google $GOOGL are committed to spend $650 billion this year combined to develop their AI capabilities. That includes new data center construction. Microsoft rolled out a "community-first AI infrastructure plan" in January that included a commitment to "pay our way" so the company's data centers don't cause a spike in residential electricity bills. "We'll ask utilities and public commissions to set our rates high enough to cover the electricity costs for our data centers," Microsoft President Brad Smith said in a blog post. Anthropic made a similar pledge earlier this month and said it "will cover" any electricity price increase stemming from their data centers. Some Democrats, though, pressed the Trump administration to do more in ensuring tech companies are held to their pledges. "A handshake agreement with Big Tech over data center costs isn't good enough," Sen. Mark Kelly of Arizona, said in a social media post. "Americans need a guarantee that energy prices won't soar and communities have a say."

Trump Says America's 'Old Grid' Can't Handle The Electricity Needed By Tech Giants: 'They Can Build Their Own Plant' - Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT)

On Tuesday night, President Donald Trump said major technology companies should generate their own electricity for AI data centers to prevent higher power bills for consumers. Trump Unveils 'Rate Payer Protection' Plan During his State of the Union address, Trump announced what he called a "Rate Payer Protection pledge," saying large tech firms must take responsibility for their energy needs. "We have an old grid. It could never handle the kind of numbers, the amount of electricity that's needed," Trump said. "So I'm telling them, they can build their own plant. They're going to produce their own electricity." He argued the move would both secure power for companies and help keep household electricity costs down. AI Data Centers Driving Record Demand The development comes as demand for electricity surges due to rapid growth in artificial intelligence infrastructure. The U.S. added a record 10 gigawatts of new data center capacity in 2025, with December marking the strongest month on record. Overall power demand rose 2.8% year over year, the fastest pace in two decades. More than half of regional power markets are now operating near tight supply conditions. The White House is expected to host technology companies in early March to discuss details of the plan, Reuters reported, citing people familiar with the discussions. The administration did not name specific firms or outline enforcement measures. Industry Already Moving Toward Self-Supply Some companies have already signaled they are prepared to invest in their own energy resources. Grid operator PJM Interconnection has also reportedly proposed that large new users bring their own generation or reduce consumption during periods of strain. AMZN is showing a downward price trend across short, medium and long-term timeframes and carries a weak Momentum score, according to Benzinga's Edge Stock Rankings. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock/ Andrew Leyden Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Trump orders tech giants to power their own AI data centers under 'rate protection' pledge

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 Tech companies may face increased costs by being required to build or source their own power generation for AI data centers instead of relying on local grids. The pledge is intended to lower consumer electricity prices by reducing the burden from AI data centers on the existing power grid. Tech companies may gain more reliable access by generating their own electricity, though failure to do so could result in curtailed power supply, especially during peak demand periods.

Trump's message for big tech with energy-hungry AI projects: Build...

Tech companies need to build their own power plants to support their energy-hungry AI projects, President Trump said during Tuesday night's State of the Union speech -- his latest effort to ease energy costs for ordinary Americans. "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. "We have an old grid," he continued. "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." Trump did not elaborate on which companies have committed to the pledge. The White House is planning to host tech companies in early March to finalize plans, two sources familiar with the matter told Reuters. OpenAI, Google and other companies at the forefront of the artificial intelligence race have faced pressure in recent months over concerns that their ambitious projects are straining the power grid and leading to higher costs for households. Some firms, including Anthropic and Microsoft, have already announced efforts to cover electricity costs associated with powering their AI data centers. As Trump spoke, Anthropic's head of policy Sarah Heck reiterated that the firm has committed to "covering 100% of electricity price increases that consumers face from our data centers." Elon Musk, who recently merged his aerospace company SpaceX with Grok chatbot maker xAI, has discussed a bold plan to build solar-powered data centers in space. Elsewhere, OpenAI's Sam Altman acknowledged during a recent appearance at a summit in India that the tech industry would likely need to move toward alternative energy sources as demand increases. "Not per query, but in total - because the world is using so much AI ... and we need to move towards nuclear or wind and solar very quickly," Altman said.