In a significant move to address growing public concern, former US President Donald Trump has announced a new initiative aimed at preventing the massive energy demands of artificial intelligence (AI) data centres from driving up electricity bills for American households. The first major technology firm to join this effort is Microsoft.
A "Community-First" Pledge from Microsoft
On Tuesday, Microsoft's President, Brad Smith, outlined the company's new commitment at an event near the White House titled 'Community-First AI Infrastructure'. Smith stated that Microsoft will no longer accept local tax reductions or discounted electricity rates in towns where it builds its data centres. Instead, the firm will pay its full property taxes and ensure its substantial power usage does not lead to higher utility rates for local residents.
"Like major buildouts of the past, AI infrastructure is expensive and complex," Smith wrote in a corresponding blog post. "This revives a longstanding question: how can our nation build transformative infrastructure in a way that strengthens, rather than strains, the local communities where it takes root?"
Bipartisan Backlash Drives Policy Shift
The announcement follows a wave of bipartisan opposition to new data centre projects across the United States. Communities from red states like Oklahoma, Tennessee, and Louisiana to blue states such as Oregon, California, and New York have protested, citing surging electricity costs, excessive water use, and local pollution.
This backlash has been potent enough to halt projects, including a proposed Microsoft data centre in rural Wisconsin that was scrapped after locals raised alarms about potential spikes in their energy bills. Data centres, particularly those powering advanced AI, are extraordinarily resource-intensive. A single large facility can consume as much electricity as a small city and use up to a million gallons of water daily.
The Environmental and Political Stakes of the AI Boom
While President Trump has actively promoted AI development during his second term—hosting tech CEOs and signing executive orders to deregulate the industry and speed up data centre permits—the affordability crisis has prompted a notable shift in rhetoric. Trump framed the new partnership on his Truth Social platform, writing, "We are the 'HOTTEST' Country in the World, and Number One in AI. Data Centers are key to that boom... but, the big Technology Companies who build them must 'pay their own way.'"
The environmental impact is already stark. Microsoft's carbon emissions have risen by 23% since 2020, directly linked to the expansion of its AI data centre fleet. Similar increases have been reported by other tech giants like Google, Amazon, and Meta. Globally, the International Energy Agency estimates that electricity consumption from data centres could double by 2026 compared to 2022 levels, a demand roughly equivalent to Japan's annual usage.
Trump confirmed that the agreement with Microsoft is just the beginning, stating his administration is working with other major technology companies to secure similar pledges. This move represents an attempt to balance the relentless pursuit of AI supremacy with the practical economic realities faced by communities hosting the infrastructure that makes it possible.
