During his State of the Union address, President Donald Trump tried to quell Americans’ concerns about rising electricity costs by claiming he had negotiated a “rate-payer protection commitment” with big tech companies that would allow them to build or pay for new power generation for their data centers. Leaders from Amazon, Google, Meta, Microsoft, xAI, Oracle and OpenAI are expected to attend the event on March 4 to sign a pledge, Fox News reported today.
At this point, there are very few details on what the promise entails, or how companies will be held accountable for keeping any commitments. “As part of this bold initiative, these massive companies will build, bring in or buy their own power supply for new AI data centers,” White House spokesman Taylor Rogers said in an email The Verge.
“We’re telling the major technology companies that they have an obligation to secure their own energy needs,” Trump said during his speech.
“They have an obligation to ensure their own energy needs”
Companies expanding their data centers for generative AI are already trying to do just that. Anthropic and Microsoft recently volunteered to cover the cost of new power plants built to power their data centers. But they would have to sign contracts with energy companies and grid operators, or local regulators would have to set new policies to keep the companies on the hook to deliver on their promises. Meta has signed a 15-year deal to cover the capital costs of three new gas-fired power plants being built in Louisiana to power its largest data center to date. However, some residents and consumer advocates are still concerned about how increased demand from the data center could increase fuel and electricity costs.
Technology companies have also recently announced a series of deals to support the deployment of next-generation nuclear reactors that could power their data centers. But the technology is still in development and is not generally expected to be online until the 2030s. Plans to connect new fossil fuel-burning power plants to the power grid are also facing delays due to a shortage of gas turbines.
Increasingly, another obstacle stands in the way of those ambitions: local pushback that has led to tech companies facing construction delays and cancellations of dozens of data center projects across the US. Subsequently, there has been a wave of promises from technology companies that address community issues.
Rising electricity rates also became a key issue in state races that Democrats won last year, including Gov. Abigail Spanberger’s victory in Virginia. Spanberger, whose state is home to the largest data center hub in the world, delivered the Democrats’ response to Trump’s address.
“When I was campaigning for governor last year, I traveled to all corners of Virginia and everywhere I heard the same pressing concern: the costs are too high,” Spanberger said. “And I know the same conversations are happening all over this country.