President Donald Trump tried to quell Americans’ concerns about rising electricity costs during his State of the Union speech by claiming that he’s negotiated a “rate payer protection pledge” with major tech companies, which would see them build out or pay for new electricity generation for their data centers. Leaders from Amazon, Google, Meta, Microsoft, xAI, Oracle and OpenAI are expected to attend a March 4th event to sign the pledge, Fox News reported today.
There are very few details at this point on what the pledge entails, nor how companies would be held accountable for following through on any commitments. “Under this bold initiative, these massive companies will build, bring, or buy their own power supply for new AI data centers,” White House spokesperson Taylor Rogers said in an email to The Verge.
“We’re telling the major tech companies that they have the obligation to provide for their own power needs,” Trump said during his speech.
“They have the obligation to provide for their own power needs”
Companies expanding their data centers for generative AI are already trying to do that. Anthropic and Microsoft have made voluntary commitments recently to cover the costs of new power plants built to serve their data centers. But they would need to sign contracts with utilities and grid operators, or local regulators would need to set new policies to keep companies on the hook to fulfill their promises. Meta has inked a 15-year agreement to cover the capital costs of three new gas-fired plants being built in Louisiana to power its largest data center yet. But some residents and consumer advocates are still concerned about how increased demand from the data center could raise fuel and electricity costs.
Tech companies have also announced a slew of agreements recently to support the deployment of next-generation nuclear reactors that could power their data centers. But that technology is still in development, and generally not expected to come online until the 2030s. Plans to hook up new fossil fuel-fired plants to the power grid also face delays with gas turbines in short supply.
Another obstacle is increasingly in the way of those ambitions: local pushback, which has resulted in tech companies facing construction delays and cancellations for dozens of data center projects across the US. Subsequently, there’s been a wave of promises from tech firms to address community concerns.
Soaring electricity rates also became a key issue in state races Democrats won last year, including Governor Abigail Spanberger’s victory in Virginia. Spanberger, whose state is home to the biggest hub for data centers in the world, delivered Democrats’ response to Trump’s address.
“As I campaigned for Governor last year, I traveled to every corner of Virginia, and I heard the same pressing concern everywhere: costs are too high,” Spanberger said. “And I know these same conversations are being had all across this country.”