Trump Mandate: Data Centers to Build Own Power Plants Amid AI Boom Costs
The surge in demand for electricity driven by the artificial intelligence boom is prompting the Trump administration to intervene, seeking to shield consumers from rising power costs. President Trump announced Tuesday that he has directed major technology companies to build their own power plants to support the energy needs of their expanding data centers.
Speaking at the State of the Union address, Trump framed the move as a “ratepayer protection pledge,” asserting he had “negotiated” an agreement with tech giants to shoulder the burden of their increased energy consumption. “They can build their own power plants as part of their factory,” he stated, aiming to prevent higher electricity bills for American consumers. A White House spokesperson elaborated Wednesday, stating that major tech companies will formally sign the pledge next week, committing to build, bring, or buy their own power supply for new AI data centers.
The administration’s initiative comes as US power demand reaches record highs, fueled by the energy-intensive processes required for AI development and operation. Utilities across the country requested $31 billion in rate increases last year, more than double the amount sought in 2024, according to research from PowerLines, a nonprofit advocate for utility customers. Many of these requests originated in states experiencing significant data center development, including Virginia, Texas, Utah, and North Carolina.
Several tech companies have already signaled their willingness to cooperate. Amazon confirmed its attendance at the White House signing next week. Microsoft’s vice chair and president, Brad Smith, issued a statement acknowledging the importance of the pledge, stating, “The Ratepayer Protection Pledge is an important step. We appreciate the Administration’s work to ensure that data centers don’t contribute to higher electricity prices for consumers.” Anthropic’s head of external affairs, Sarah Heck, posted on X, committing the company to covering 100% of electricity price increases for consumers resulting from its data centers.
While Microsoft and Anthropic have previously announced commitments to cover the costs of their data centers’ electricity consumption, details surrounding those plans have remained limited. The current push from the Trump administration aims to formalize these commitments and ensure broader industry participation.
Big Tech’s Shift Towards Self-Sufficiency in Power
The trend of data center developers building their own on-site power plants, largely fueled by natural gas, has gained momentum in the past year. This strategy allows companies to bypass potential delays in connecting to the existing power grid, a critical factor in the fast-paced AI race. However, this approach raises concerns about the environmental impact, as the vast majority of these plants currently rely on fossil fuels, despite tech giants’ stated commitments to clean energy.
Cleanview, a data visualization software company tracking clean energy and data center projects, reports that approximately 30% of all planned data center capacity in the US intends to utilize on-site power generation. Notably, 90% of this planned capacity was added in 2025. The company’s review of permit documents, corporate filings, and news reports identified 46 data center projects planning to draw power “behind the meter” – meaning they will generate their own electricity without relying on the traditional grid.
Examples include Meta’s plans to construct a natural gas plant for its data center in New Albany, Ohio, and the joint initiative by Oracle and OpenAI to power their Project Jupiter data center in New Mexico with two large-scale natural gas-fired systems. Despite public commitments to clean energy, Cleanview’s analysis reveals that natural gas powers 75% of the equipment currently planned for these on-site facilities.
Companies have expressed interest in utilizing cleaner technologies like small modular nuclear reactors and geothermal energy, but widespread deployment of these solutions remains years away.
Texas Emerges as a Data Center Hub
Texas is rapidly becoming a leading location for new data center development, accounting for more than one-third of the behind-the-meter power buildout. This could soon position the state ahead of Virginia as the nation’s data center capital. Oracle and OpenAI are notably investing in Stargate data centers in Texas, planning to power them with on-site natural gas plants. Fermi America is also proposing the construction of the world’s largest combined data center and power plant in the Texas Panhandle.
Beyond Texas, New Mexico, Pennsylvania, Utah, and Wyoming also represent significant areas of behind-the-meter capacity expansion. West Virginia, Tennessee, Ohio, Virginia, and North Carolina are also seeing substantial investment in these types of projects.
The Trump administration’s intervention reflects a growing awareness of the energy demands of the AI industry and the potential impact on consumers. While the long-term effectiveness of the “ratepayer protection pledge” remains to be seen, it signals a proactive approach to managing the energy implications of the rapidly evolving AI landscape.