As the United States grapples with the surging demand for electricity driven by the growth of data centres, President Donald Trump is growing increasingly concerned about the potential impact on energy prices and, ultimately, his party’s electoral prospects.
The president’s anxiety is evident in two recent actions. On January 13th, Trump and Microsoft’s president jointly announced that the tech giant would pay full property taxes and forgo any electricity rate discounts for its data centres. “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,'” Trump wrote on Truth Social.
Just days later, on January 16th, Trump and governors of several north-eastern states directed the country’s largest power grid operator to hold an emergency reliability power auction by September. This move could force tech giants to pay for the construction of new power plants by requiring them to bid on the future reliability of the electricity they plan to draw from the grid. “I never want Americans to pay higher Electricity bills because of Data Centers,” Trump said.
However, the president’s efforts to rein in the rising electricity costs may be hampered by his own administration’s policies. While AI is increasing the demand for electricity, the Trump administration is blocking renewable energy projects that could boost supply, instead pushing the expansion of drilling for gas and oil. Ironically, these efforts to reverse the closure of ageing coal plants and restart the overseas export of liquified natural gas could further drive up costs for domestic consumers.
The issue of power prices is closely tied to the broader concern over the cost of living in the US, a topic that has Trump’s party on the back foot as congressional elections loom in November. The president had promised to slash Americans’ electricity bills by half, but as , there is little prospect of him delivering on that vow.
Across the Atlantic, European governments are also grappling with the limitations of their resources in the face of the insatiable hunger of data centres. In Germany, high energy prices constrain growth, leading Chancellor Friedrich Merz’s ruling party to agree to subsidise heavy industrial use of electricity until 2028 and reduce grid fees for consumers and businesses. In the UK, where electricity rates are already among the highest in the world, the government has proposed offering discounts to data centres in “AI growth zones” to encourage investment and development.
As the data centre boom continues, the next stops are locales with resource limitations of a different sort. Trump and the tech giants have committed to constructing one of the largest data centres in the world in the United Arab Emirates and several more facilities elsewhere in the Gulf states, where energy is cheap but water, crucial for cooling, is scarce. In India, where electricity availability is far less reliable than in the US or Europe, the promised $17 billion in investment may be needed to fund grid modernisation or prop up ageing infrastructure.
The challenge of balancing the surging demand for electricity from data centres with the need to keep prices affordable for consumers is a delicate balancing act that will have significant political implications, both in the US and globally. As the data centre boom continues, the ability of governments to navigate this complex issue will be a crucial factor in determining the outcome of future elections.
