The data centers that power the AI boom also need power themselves—and a lot of it. Now the Trump administration wants the tech companies cashing in on AI to foot a bigger part of the bill.
The administration said Friday that it would urge major East Coast power grid operator PJM Interconnection to hold an emergency power auction for tech companies, inviting them to bid on 15-year contracts for new electricity generation. Under the plan, the auction would raise billions of dollars that would then go directly toward building out $15 billion in new power plants.
Tech companies would be locked into paying for the power they buy at auction over the lifetime of the long-term contracts, whether they wind up using the electricity or not, a measure designed to smooth out spikes in electricity costs and offer “15-year revenue certainty” for new plants.
The governors of Virginia, Maryland, Ohio, Pennsylvania, and other states in PJM’s area signed on to the proposal to remake America’s power supply. Energy Secretary Chris Wright and Interior Secretary Doug Burgum also support the plan, which urges the power grid operator to make changes but isn’t binding.
“For two years, I’ve been sounding the alarm, explaining that without fundamental changes to PJM, Pennsylvanians were going to be paying more and more, and getting nothing in return,” Pennsylvania Governor Josh Shapiro said in a press release. “I’ve been working with my fellow governors and federal energy officials to push PJM to make needed reforms, and I’m glad the White House is following Pennsylvania’s lead and adopting the solutions we’ve been pushing for.”
In a fact sheet on the proposal published on the Department of Energy’s website, the Trump administration is also encouraging PJM to cap what existing power plants charge in an effort to pass along savings to residential power users. The DOE described the measures as “temporary,” noting that the changes could stave off painful future price increases and make blackouts less likely.
Worries grow over resource-hungry AI
Acknowledging the growing backlash around AI data centers, on January 13 Microsoft announced a new initiative that it claims will protect residential customers from eating the cost of its AI buildout. The tech giant says it will “work closely” with utility companies on the price of electricity, likening its AI expansion to other historic national infrastructure improvements like “canals, railroads, the electrical grid, or the interstate highway system.”
“Communities value new jobs and property tax revenue, but not if they come with higher power bills or tighter water supplies,” Brad Smith, Microsoft vice chair and president, wrote in a blog post. “Without addressing these issues directly, even supportive communities will question the role of data centers in their backyard.”
Trump hinted at Microsoft’s plan earlier this week in a Truth Social post, stating that new policies would ensure Americans don’t “pick up the tab” for higher energy bills. “I never want Americans to pay higher Electricity bills because of Data Centers,” Trump wrote. “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.’”
Americans are starting to blame AI for high bills
In the AI arms race, tech’s hottest companies often frame their insatiable appetite for electricity as an inevitability rather than its own problem. But as the cost of electricity goes up, Americans may disagree.
Tech giants are pouring billions into massive electricity- and water-guzzling server warehouses to fuel their AI ambitions. In 2025 alone, five companies making big bets on AI invested $399 billion into the technology and its accompanying infrastructure, and that number is expected to shoot up to $600 billion by 2028. Those investments have prompted broad concerns that the stock market’s concentrated growth around AI represents a single point of failure if the industry starts to wobble.
Other worries are much less theoretical. Americans are grappling with higher power bills and they’re starting to blame the tech industry. A nationwide survey last year found that two-thirds of those polled believe AI is driving up their electricity bill, and most said they couldn’t afford a $20-per-month increase.
Beyond power, data centers need massive amounts of water for cooling all of those servers humming day and night. In the Dalles, Oregon, city officials are seeking to buy part of a nearby national forest to get access to more water—a move that is alarming some residents and environmental groups. While officials have claimed the water will meet growing population demands, Google is the city’s thirstiest resident; the tech company’s data centers already consume a third of the city’s water.