Even as he pumps up the artificial intelligence boom, President Donald Trump is also warning the tech industry that they should “pay their own way” on electricity.
But even if companies commit to shouldering more infrastructure costs — as Microsoft did Tuesday — it’s unclear how much of an impact that would have on household utility bills that usually absorb the cost of meeting rising electricity demand.
Trump wrote in a Truth Social post Monday that he was working with tech companies on policies that would help them grow without raising costs for ratepayers. “I never want Americans to pay higher Electricity bills because of Data Centers,” Trump wrote.
It comes as a bipartisan backlash against data centers has grown across the country, especially in areas seeing rising electricity bills. Elected officials are discussing new restrictions, and local resistance in 2025 forced companies to cancel some AI infrastructure projects, including a Microsoft development in Wisconsin.
According to a report by Data Center Watch, some $98 billion in projects were blocked or delayed in just the second quarter of 2025, with even more affected in the second half of the year.
In response, Microsoft on Tuesday announced what it called the Community-First AI Infrastructure Initiative. That included a pledge to pay more for the electricity that serves its data centers, including any new infrastructure needed to serve them. The company also said it would collaborate with local utilities to defray the cost to ratepayers and figure out what infrastructure is needed.
“Especially when tech companies are so profitable, we believe that it’s both unfair and politically unrealistic for our industry to ask the public to shoulder added electricity costs for AI,” wrote Microsoft President Brad Smith in a blog post. “Instead, we believe the long-term success of AI infrastructure requires that tech companies pay their own way for the electricity costs they create.”
Smith pointed to a partnership with Wyoming utility Black Hills Energy, which helped negotiate a larger power contract to bring on renewable energy options for data centers that did not affect rates. Wyoming lawmakers have also passed legislation that allows for customized rates for large loads.
The tools, Black Hills Energy spokesperson James Williams said, “allowed us to plan data center growth in a way that aligned with community priorities while shielding our existing customers from added costs.”
Although Trump indicated in his post Monday that more announcements would be coming from other tech companies, it’s unclear who else may make similar pledges. In a statement, Data Center Coalition President Josh Levi said that data centers “strive to be good neighbors in the communities where they operate.”
“The data center industry is engaging with local residents and community leaders to ensure the continued responsible development of this important industry, including the use of resources like energy and water, and ensuring that data centers continue to pay for the energy they use,” Levi said in a statement. He added that the coalition applauded the administration’s focus on the need for grid upgrades.
What role for data centers?
The data center boom, however, is just one element that has boosted electricity prices across the country. According to Bureau of Labor Statistics data, electricity prices were up 6.7 percent in the last 12 months. The U.S. Energy Information Administration has also projected that electricity prices will rise and several independent analyses have said that the Trump administration’s policies against renewable energy could further drive up costs.
Power-hungry data centers — which could consume as much as 12 percent of the grid by 2028, according to federal estimates — are a target of consumers’ ire as they pull an increasing amount of power from the grid. As individual data centers balloon in size and can consume as much power as cities, their impact on the grid extends beyond their immediate construction and can necessitate upgrades to equipment or new generation.
A recent study from the Lawrence Berkeley National Laboratory found that serving data centers is not the main driver of those cost increases. The study, in fact, found that states where load has risen generally see price reductions, although households did not necessarily see lower costs. Cost increases were also due to increased spending on grid infrastructure, transmission and distribution upgrades, recovery from natural disasters, and variability in the price of natural gas.
Utilities are already seeking more money to pay to upgrade decades-old infrastructure, replace aging fossil fuel plants and harden the grid against extreme weather. That’s led to arguments that deep-pocketed companies could help pay for those upgrades while also adding significant load to the system.
A December study from researchers at Stanford University found that the western U.S. and Canada has “substantial room” in the existing transmission system to serve new load and integrate new generation, especially if utilities invest in large transformers and technology that can increase flexibility of transmission assets. That, the study found, could allow utilities to bring on data centers and free up money to pay for other much-needed repairs.
“With or without data centers, we need to harden our infrastructure. We have to build new transmission and distribution equipment. Bills would go up even without data centers,” said Liang Min, study author and managing director of Stanford’s Bits & Watts Initiative. “We should really welcome data centers, find a way to better utilize our existing infrastructure and connect them faster, and by doing so, we can lower rates for the general customer and get the money to harden infrastructure.”
Emerging research has also shown that if data centers agree to be flexible in their power demand and reduce their load during times when the grid is stressed, more could be brought online without raising significant costs.
The data center boom isn’t expected to slow down any time soon. A Moody’s Ratings report Monday predicted that companies will spend at least $3 trillion over the next five years on data center investments. Meta CEO Mark Zuckerberg said this week that the company planned to build tens of gigawatts this decade and “hundreds of gigawatts or more over time” as part of its Meta Compute initiative.
That’s led to calls for tighter regulations — or even an outright moratorium — on new construction. Sen. Bernie Sanders (I-Vt.) last month became the first high-profile federal lawmaker to call for a national pause on data center construction.
Mitch Jones, managing director of policy and litigation for Food & Water Watch, said that even after Microsoft’s commitments, a moratorium is still necessary because “we don’t believe that communities should be depending on the goodwill of industry.”
Utilities, Jones said in an interview, make their profits by getting a return on investment for the infrastructure they build. “The idea that somehow big tech companies are going to be able to come up with a way that they’re covering all the costs and the utilities aren’t able to recover the cost of lines is to us fanciful,” he said.
