President Donald Trump said in his State of the Union address on Tuesday that technology companies will be required to supply their own electricity for artificial intelligence (AI) data centers, framing the move as a way to protect consumers from rising utility costs.
“Many Americans are also concerned that energy demand from AI data centers could unfairly drive up their electric utility bills,” Trump said. He announced a “new ratepayer protection pledge,” which he described as an agreement with major tech companies obligating them to “provide for their own power needs.”
Under the pledge, companies would build their own power plants as part of their factories. Trump said the strategy would prevent electricity prices from increasing for consumers and, in some cases, could lead to substantial price reductions for local communities.
“This is a unique strategy never used in this country before,” Trump said. “We have an old grid. It could never handle the kind of numbers, the amount of electricity that’s needed [for AI].”
The president argued that requiring companies to generate their own power would both secure their energy supply and lower electricity costs “for all of your cities and towns.”
White House Office of Science and Technology Policy Director Michael Kratsios previewed the concept last month at the CES trade show in Las Vegas, saying the administration would encourage companies to build their own energy supplies.
“If you want to build a data center, you should … be building your own power to support that. You shouldn’t be drawing from the larger grid and ultimately raising prices for Americans,” Kratsios said.
“That’s something that we’re pushing a lot of the folks in the big data center companies to work on, and something we’re gonna be doing for a very long time ahead,” he added.
The announcement comes amid federal projections of steep growth in AI-driven energy demand. Last year, the Department of Energy predicted that half of all new American electrical power will be consumed by AI data centers by 2030 and warned that planned grid-connected supply may fall short of expected demand.