Microsoft has a plan to stop AI data centers from hiking up your electricity bill

By Clare Duffy, CNN

New York (CNN) — Microsoft says it will ask to pay higher electricity bills in areas where it’s building data centers, in an effort to prevent electricity prices for local residents from rising in those areas. The move is part of a broader plan to address rising prices and other concerns sparked by the tech industry’s massive buildout of artificial intelligence infrastructure across the United States.

Big Tech is spending hundreds of billions of dollars to build the data centers that power AI systems. They hoover up vast amounts of electricity, but it’s a project that leaders in Silicon Valley and on Capitol Hill have framed as essential for the economy and national security.

But the rising costs from that electricity demand has prompted backlash from local communities worried about the impact on their energy bills and the environment. Areas near data centers saw an increase in electricity costs of as much as 267% compared to five years ago, a Bloomberg News analysis from last year found.

What’s more, many Americans have argued that they did not ask for the AI buildout and worry they won’t benefit from it, given warnings from tech leaders that AI could eliminate jobs.

Microsoft, accordingly, is now saying it will seek to pay not just for the energy its data centers use, but also to cover the costs of updating and adding necessary electricity to the grid, so those costs aren’t passed on to other local utility customers.

“I think the bare minimum, as we look to the future, is to give these communities around the country the confidence that when a data center comes, its presence will not raise their electricity prices,” Microsoft President Brad Smith said at an event in Washington, D.C. on Tuesday announcing the plan.

Microsoft’s efforts to be a good neighbor in the areas where it builds data centers also include plans to invest in local water systems, libraries and schools, as well as job and AI skills training.

The company’s Tuesday announcement comes a day after President Donald Trump teased plans he said his administration developed with Big Tech to address Americans’ rising electricity bills.

“Therefore, my Administration is working with major American Technology Companies to secure their commitment to the American people, and we will have much to announce in the coming weeks to ensure that Americans don’t ‘pick up the tab’ for their POWER consumption, in terms of higher Utility bills,” Trump said in a Truth Social post on Monday, adding that the first announcement would come from Microsoft. The move comes as Trump has been taking steps to address Americans’ affordability concerns.

Despite the protests against AI data centers, Smith said, “we fundamentally believe that data centers can fuel economic prosperity, not for the few, but for everybody in a community that depends on these schools, and these hospitals, and all of these other public services and jobs.”

Smith added that the company will pay for water “replenishment” when its data centers must draw on local water supplies. In Arizona, for example, Microsoft has worked with the municipality to find and fix leaks in their pipes that could be causing the community to lose fresh water. He also said Microsoft will not ask for property tax reductions or abatements in the areas where it plans to build.

The company plans to provide job training for construction workers to build data centers and long-term data center operators, although data centers require fewer workers to run once they’re fully built. Microsoft also says it will partner with local schools, libraries, non-profits and businesses to offer AI skills training.

Smith framed the AI data center buildout in grand terms, as the next phase in America’s infrastructure history.

“Decade after decade, century after century, infrastructure has always raised new questions, new concerns, new controversies, and yet throughout it all, it has been vital to the growth and prosperity of our nation,” he said.

The-CNN-Wire
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