The U.S. government is reportedly negotiating a legal commitment from major technology firms regarding the electricity consumption of data centers that support artificial intelligence (AI) services. According to sources familiar with the discussions, the administration is seeking agreements from companies such as OpenAI, Google, Amazon, and Meta to adhere to a new compact regulating the rapid expansion of AI data centers. This initiative follows an announcement by Microsoft, which committed to increased electricity payments for its data centers, greater infrastructure coverage, and reductions in water consumption.
In a recent Truth Social post, U.S. President Donald Trump stated that Microsoft was collaborating with other tech companies to ensure that Americans would not have to “pick up the tab” for their power consumption. The draft compact, which has not yet been finalized, is intended to provide a framework that would govern energy usage, water supply management, and community impact, while preventing cost increases for residential electricity.
The draft, which was obtained by Politico, outlines obligations aimed at ensuring that the energy demands of data centers do not translate into higher household electricity prices, exacerbate water shortages, or jeopardize grid stability. The agreement is framed as a voluntary pact between President Trump and leading U.S. tech firms, and it could involve substantial commitments from AI industry giants, including OpenAI, Microsoft, Google, Amazon, and Meta.
As discussions continue, the compact seeks to establish principles that would require AI data center developers to bear the costs of new power generation necessary to operate their facilities. Companies would also need to sign long-term electricity contracts to ensure that other consumers do not absorb costs in case of a data center’s operational failure. Furthermore, developers would be responsible for the full expenses related to necessary upgrades for power transmission infrastructure.
White House spokesperson Taylor Rogers acknowledged the ongoing discussions, stating, “As President Trump announced weeks ago, top tech companies are working with the President to ‘pick up the tab’ for their power consumption as they build data centers. More to come soon!” However, the White House also indicated that the draft is “outdated and no longer accurate,” without specifying which aspects have changed.
The decentralized nature of the U.S. electricity grid presents a challenge, as grid operators, state regulators, and utilities would need to collaborate on frameworks to make the pact enforceable. During a recent interview, Energy Secretary Chris Wright addressed public skepticism, stating, “People are skeptical. ‘Oh my gosh, this is going to further add insult to injury and drive up my energy prices.’ I understand their concerns.” Wright assured that discussions with major developers are underway to mitigate electricity price increases.
At the core of the proposed compact is a mandate for AI data center operators to bear 100% of the costs associated with new power generation required for their operations. The agreement also calls for companies to work with various regulatory bodies to establish energy and transmission rates that would ideally protect and potentially lower residential electricity prices in the areas where these data centers are located.
The compact aims to include provisions for grid reliability, requiring companies to coordinate with grid operators to utilize noncritical backup power during emergencies. Companies would voluntarily agree to limit new data center loads as necessary to ensure stable electricity for households. This stipulation comes as electricity costs rise, outpacing inflation over the past year.
Some companies assert that they already handle their own costs effectively. For instance, Meta claims it covers all of its energy expenses and has conducted studies indicating that its clean energy initiatives do not elevate costs for consumers. The draft also incorporates provisions concerning water usage, urging companies to adopt a “water positive” approach that ensures sufficient water supply for their operations and avoids adverse impacts on local water resources.
Furthermore, the compact encourages the establishment of AI awareness programs in nearby communities and schools, as well as practices aimed at reducing noise and traffic disruptions associated with data center operations. This initiative could play a crucial role for companies seeking federal assistance to expedite grid interconnections, though it could also pose challenges for AI infrastructure projects.
As the administration prepares to formally announce the compact, it represents a significant step towards shaping the operational landscape of AI infrastructure while aiming to address the environmental, economic, and community challenges posed by data centers. The compact, if successfully implemented, may set a precedent for how the burgeoning AI sector interacts with energy and local resources in the United States.
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