In early March, Trump touted a “pledge” from Big Tech companies to pay for the electricity costs of their own massive data centers. The idea isn’t particularly new: for the last two years, utilities have been working to figure out how to insulate customers from data centers. But there's a certain irony in watching the same president who spent his first months in office aggressively pushing data center development suddenly discover that everyday Americans are footing the bill.
The majority of Americans are now deeply concerned that data centers used to train artificial intelligence are, or soon will be, negatively impacting their lives - and not just their electricity bills. The rush to build has led to more fossil fuel plants on the horizon, has meant more pollution in communities, and decisions being made in secret. This pinky promise isn't nearly enough. The good news is that real solutions exist, but they’re going to require a lot more than just a speech and a handshake.
Data centers used to train AI are in a different class of electricity customer altogether, unlike anything that our energy system has seen before. Increasingly, companies like Microsoft, Meta, Amazon, Google, Oracle, and xAI are bringing data centers online that, when complete, will each require more than a gigawatt of power – equivalent to the peak use of the entire city of Orlando, Florida. And each of these data centers require new power plants, transmission lines, and substations. It's as if we're building a whole new electric system just for data centers, and pretending that we're still in business as usual. But the impacts on customers and communities are very real.
For example, a recent assessment of the electricity market that serves utilities from Virginia to New Jersey and out to Chicago showed that the anticipated demand from data centers had driven up costs for all customers by $21.3 billion over the last three years. Similarly, a Wisconsin utility recently disclosed that if they didn't change the way that they did business, new AI factories by Microsoft and Oracle would drive up costs to all other customers by $1.5 billion, an extraordinary subsidy from everyday Americans to Big Tech.
But it isn’t just infrastructure and electricity costs that are burdening customers. The rush to serve AI data centers is threatening a crippling blow to climate progress and public health. A new Sierra Club tracker shows plans for 250 gigawatts of new gas-fired power plants nationwide, nearly as much as all existing coal and nuclear plants put together. This rush to gas will tether electricity customers to the whims of international gas prices for a generation, and could set back climate progress by decades. Just last year, North Carolina voted to scuttle climate targets in favor of data centers, and the Trump administration has seized on the AI rush as its justification to jettison bedrock environmental protections from fossil fuel pollution.
Locally, data centers can have enormous hidden pollution impacts as well. For example, data centers on the outskirts of Washington DC are collectively permitted to emit as much smog-forming pollution from on-site diesel generators as a large coal plant — and almost no one knows it. Almost every major data center relies on massive backup diesel generators in case the grid fails, but permits for these facilities routinely fly under the radar, and increasingly, major players like Microsoft are looking to use those diesel generators as a primary source. Few of these deals are out in the open. Communities across the country are finding themselves battling for transparency, wondering why local officials are subject to non-disclosure agreements, or willing to sign secret deals with data center developers.
A flimsy pledge from the Big Tech companies that they'll try not to raise electricity prices isn't good enough, and the big technology companies know that they have to do better. Rather than fighting consumer advocates, data center developers should be advocating at the state level for regulators to hold them accountable for their costs and impacts, for universal transparency and reporting, and for rigorous clean energy standards that will leave our grid better off, not dirtier and more volatile. With a vacuum in federal leadership, states can get their hands around these problems with real solutions - like regulations that assign cost and risk to data centers, requirements to buy local new clean energy, and standards for air permits that protect nearby communities.
This pledge is a baby step towards real, concrete progress. The question still remains: who’s on the hook if utilities build hundreds of new power plants, but then the AI flood dries to a trickle? Like any industry, data centers can either be good neighbors or a problem, and technology companies have an opportunity to change the way they do business – not through empty pledges, but by showing that they're actually in for the long game with our communities and our climate.