Meta's Stanton Springs Data Center in Newton County, East of Atlanta. The reality is tech companies have been trying to secure power from every source they can find – both on and off the grids – with data centre power demand set to triple by 2035. — AP
US President Donald Trump is calling for an emergency wholesale electricity auction that, his administration says, will force technology companies to pay for the new power they need to run massive AI data centres under construction across the country.
The truth is Amazon.com Inc, Microsoft Corp, Alphabet Inc, Meta Platforms Inc, OpenAI and all the other major tech firms behind the AI data centre boom are more than happy to shell out for more electricity generation. And they have been.
"They have no shortage of money,” said Bloomberg Intelligence analyst Anurag Rana of the tech giants powering the global artificial intelligence race. "They really don’t have a problem with funding this thing.” Amazon, Microsoft, Alphabet and Meta collectively spend hundreds of billions of dollars on capital investments annually, far exceeding the budgets of the entire utility segment.
Data centre developers have in fact already said they’d like to buy electricity off the nation’s power grids as opposed to signing contracts directly with power generators. That’s because grid rates can be cheaper, grids are equipped with backup resources and such systems can help stabilise supplies during extreme weather events. Hyperscalers have also been signing contracts to help bring back nuclear or build new nuclear.
Either way, the reality is tech companies have been trying to secure power from every source they can find – both on and off the grids – with data centre power demand set to triple by 2035.
"We agree data centres should pay their own way,” a Google spokesperson told Bloomberg. "For us, it is table stakes.” Amazon’s top lawyer, David Zapolsky, similarly applauded Trump’s plan in a LinkedIn post, describing it as a means of tackling "America’s outdated grid challenges.”
In calling for an auction, Trump may be solving a public relations problem for tech companies, according to analysts. The industry and their power suppliers have drawn criticism over rising electricity bills and the potential environmental impacts of new plants. An auction like the one Trump’s proposing would allow them to circumvent the political headwinds facing individual projects.
"This could be a more expeditious way to simply address the issue, as opposed to dealing with all this resistance and problems that are associated with it,” said Paul Patterson, a utility analyst at Glenrock Associates LLC.
Under Trump’s plan, grid operator PJM Interconnection LLC will hold an auction for tech companies to bid on 15-year contracts for new electricity generation capacity. Such contracts are exactly what data centre developers are after, offering "more stability, more certainty and more predictability about what the price is going to be,” Patterson said. – Bloomberg
