Big tech to soon pay for power costs for AI data centres? Trump has a plan amid surging energy demands: Report
Data centres have become an absolute necessity for tech companies aggressively pushing AI to gain an edge in the global race. However, power costs have surged in areas where data centres are located.
United States President Donald Trump, together with governors from several Northeastern states, is set to announce an emergency wholesale electricity auction on Friday, according to Bloomberg. The move could require American technology companies to fund new power plants.
The surprise plan, which Bloomberg reported will be announced Friday morning, comes amid growing tension over how the US can supply electricity to power-hungry data centres without hiking bills for households and businesses.
Data centres have become an absolute necessity for tech companies aggressively pushing AI to gain an edge in the global race.
What's on Trump's agenda?
According to Bloomberg, the Trump administration and some US governors are planning to ask grid operator, PJM Interconnection LLC, to hold an auction for tech companies to bid on 15-year contracts for new electricity generation capacity.
Citing a White House official familiar with the development, the report says the auction will award contracts for the construction of some $15 billion in new power plants.
“We don’t have a lot to say on this. We were not invited to the event they are apparently having tomorrow and we will not be there,” PJM spokesman Jeffrey Shields told Bloomberg via email.
The push by Trump and the governors comes amid growing concerns that power demand is far outpacing supply in regions managed by PJM.
What does the move mean for tech companies and US citizens?
If Trump's plan to hold the auction proceeds as envisaged, tech giants will be required to pay for power for the duration of their contracts, regardless of whether they use electricity.
The move will provide secure revenues for years in a market notorious for price volatility and generator bankruptcies, according to Bloomberg.
The action will benefit millions of US citizens too.
PJM Interconnection, which is already home to the world’s biggest concentration of data centres, serves more than 67 million people from the Mid-Atlantic to the Midwest.
It expects peak demand across its system to jump 17% by 2030 from this year’s high.
The tech giants paying for power to operate their data centres may help people not bear the brunt of companies using huge amounts of electricity.
Trump has repeatedly described power plants being built alongside data centres, and on Monday, he doubled down on the idea, insisting in a social media post that the big technology companies that construct data centres must “pay their own way.”
“I never want Americans to pay higher Electricity bills because of Data Centers,” Trump wrote in his post.
- The Trump administration seeks to auction contracts for new power generation to manage rising energy demands.
- Tech companies will be required to pay for power, ensuring they contribute to infrastructure costs.
- The plan aims to prevent higher electricity bills for consumers while supporting data center operations.
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