First, the President claims that “Americans should never pay higher electricity bills because of data centers”, which is a nice idea, although someone should tell him that it sounds like the very thing he fears has already happened. At any rate, what he’s teasing with Microsoft is what he claims is the first of many energy-related projects with big tech companies. To that end, he writes:
“First is Microsoft, who my team is working with, and who will be making big changes starting this week to ensure Americans don’t pay higher utility bills for their electricity consumption. We are the ‘hottest’ country in the world, and number one in AI. Data centers are the key to that surge, and keep Americans free and safe, but, the big technology companies that build them have to ‘pay their way.’ Thanks, and congratulations to Microsoft. There will be more coming soon! Chairman DJT”
As Gizmodo wrote last summer, power demand from the massive data centers being used to train and run AI models has driven up the average American electricity bill, and the amount varies from place to place. When this story broke over the summer, consumer energy bills had increased by an average of about 6.5% a year, but in Maine, for example, they had increased by a staggering 36.3%, and that was reportedly due to the “AI Tax.” Meanwhile, utility companies like Pacific Gas & Electric have posted record profits in recent years. Funny how it works.
It’s really anyone’s guess how Trump and Microsoft will fix this issue. Trump has recently been moving toward cosmetic economic populism — seemingly in the form of deals he can claim for short-term victories, like when he asked Novo Nordisk to lower the price of Ozempic. Democrats on the House Ways and Means Committee wrote a letter to Novo Nordisk after that mysterious deal, asking what might be included in the still-secret terms of that agreement — including some unsettling ambiguity about future prices for other drugs. But who wants to hear about a stupid letter from petty Democrats when President Deal successfully lowered the price of what he has nicknamed the “fat drug”?
But keeping energy bills low is difficult for Microsoft because, unlike Novo Nordisk, Microsoft doesn’t actually set the prices Trump is trying to keep low. One thing Trump could demand from Microsoft is that Microsoft subsidize everyone’s energy bills. That would do, but last I checked Microsoft is not a charity.
However, six days ago it was reported that Microsoft is already working with Midcontinent Independent Systems on a project aimed at modernizing the power grid with Microsoft’s technology. Reuters writes that Microsoft’s technology will “help predict and respond to weather-related power grid disruptions, transmission line planning and accelerate certain operations.”
This doesn’t sound like a slam dunk to dramatically reduce energy costs, but it’s easy to imagine broader grid modernization, at least spreading price spikes more evenly, or even helping integrate unused renewable energy and reduce the well-known bottlenecks caused by aging energy grids. But is this, or something similar, what Trump is referring to? For his own sake, I hope that doesn’t happen, because it seems like this is the kind of confusing and complicated scheme typically associated with weak Democrats, not Mr. Chip Ozempic.
Gizmodo contacted Microsoft and the White House for more information about this plan. We’ll update if we hear back.
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