Data centers emerge as the biggest variable in U.S. midterms… even Trump on edge

Rising U.S. electricity bills sour public sentiment

Big Tech pledges to shoulder data-center power costs

U.S. grid regulation fragmented across 50 states

Policy implementation won’t be easy

U.S. President Donald Trump is facing political pressure over electricity demand from artificial intelligence (AI) data centers. With frustration mounting over higher power bills, his push to expand data centers is becoming a political liability ahead of the midterm elections.

According to CNBC on the 4th (local time), Trump summoned major Big Tech companies to the White House that day and had them sign a pledge committing to supply the electricity needed for AI data centers on their own. The move comes as U.S. public opinion has deteriorated amid recent electricity-price increases.

Trump has actively backed the AI industry, viewing it as a key engine of economic growth and a strategic sector underpinning national security in competition with China. But this cooperation with Big Tech is turning into a political burden as Democrats intensify their focus on the rising cost of living.

In several parts of the United States, residents’ backlash is also growing, with data centers increasingly blamed for higher electricity bills.

Trump had promised to cut electricity bills in half in his first year in office, but in 2025 U.S. residential electricity prices rose 6% on average nationwide.

“Data centers need a little PR,” Trump said that day. “People think when data centers come in, electricity bills go up, but that’s not the case.” He claimed, “That won’t happen, and even if it happened in some places, it won’t happen going forward.”

The pledge was joined by major technology companies including Amazon, Google, Meta, Microsoft, xAI, Oracle and OpenAI.

“These companies have promised to directly bear—or pay for—all power generation and electricity costs required for AI projects,” Trump said, adding that they would “build new power plants where possible to expand grid capacity.”

However, the agreement is said not to include specific, legally binding obligations.

Previously, White House trade and manufacturing adviser Peter Navarro had said the administration would “force” tech companies to internalize data-center-related costs.

Still, translating such commitments into actual policy is expected to be difficult. U.S. power-grid regulation is dispersed across 50 states, and each state has different public-utility commissions and relevant laws.

Rob Gramlich, head of consulting firm Grid Strategies and a former economic adviser at the Federal Energy Regulatory Commission (FERC), told CNBC that “rules requiring data-center developers to pay for new generation costs ultimately need approval from state governments.”

“The White House does not have the authority to decide this unilaterally, and tech companies can’t implement it on their own either,” he said.

Democrats moved quickly to criticize the move. Sen. Mark Kelly of Arizona said, “Just cutting a handshake deal with Big Tech over data-center costs is not enough,” adding, “We need a firm guarantee that energy prices won’t surge.”

The problem is that data-center electricity demand is already far outpacing the growth in power supply.

Goldman Sachs said in a recent report that surging data-center demand would lift electricity prices by about 6% through 2026, followed by an additional 3% through 2028.

The issue is especially acute at PJM Interconnection, the largest power grid in the United States. PJM manages the grid across 13 states in the Midwest and Mid-Atlantic.

The cost of securing power supply has jumped recently, with about $23 billion attributed to rising data-center demand, according to analysis. Those costs are ultimately passed on to consumers’ electricity bills.

Power-market watchdog Monitoring Analytics described this as a “large-scale transfer of wealth.”

In response, the Trump administration and a bipartisan group of governors called on PJM to hold an emergency power auction to bring tech companies into the construction of new power plants.

Energy Secretary Chris Wright in October last year asked FERC to take oversight of large data centers’ grid-connection issues.

That could make data centers pay for new transmission construction, but power-plant construction largely falls under state jurisdiction.

“To directly address generation expansion, a new federal law is needed,” Gramlich said.

In Washington, discussion of data-center regulation is spreading on a bipartisan basis.

Illinois Gov. J.B. Pritzker proposed suspending data-center tax incentives for two years. Sen. Bernie Sanders of Vermont is calling for a moratorium (temporary suspension) on data-center construction.

Florida Gov. Ron DeSantis has also proposed legislation to regulate data centers to protect households from rising electricity bills.

Still, Trump is widely seen as wielding strong political influence over the AI industry. He has often pressured independent regulators and has used the White House’s political clout to push companies to move in directions they want.

New York — Park Shin-young, correspondent nyusos@hankyung.com