The AI data center boom has triggered a dramatic spike in electricity costs, and President Donald Trump has a plan to stop it.
To do this, Trump said at Tuesday’s State of the Union address that he issued a mandate for data centers to build their own power plants.
Trump said he’d “negotiated” a ratepayer protection pledge with major technology companies and billed it as a unique solution to Big Tech’s mounting power demand that would also protect American consumers from higher electricity bills.
“They can build their own power plants as part of their factory,” Trump said.
Many data center sites have already started building their own power plants. The vast majority of this buildout will initially run on fossil fuels, despite tech giants’ clean energy commitments.
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When reached for comment on Wednesday morning, a White House spokesperson gave the following statement: “Major Tech companies will join President Trump at the White House next week to formally sign the Rate Payer Protection Pledge that he announced during his historic State of the Union address. Under this bold initiative, these massive companies will build, bring, or buy their own power supply for new AI data centers, ensuring that Americans’ electricity bills will not increase as demand grows. President Trump is committed to ensuring American AI dominance while simultaneously lowering costs for working families.”
A spokesperson for Amazon confirmed to Business Insider that it will attend the White House next week.
“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,” Microsoft vice chair and president Brad Smith wrote in an e-mailed statement.
A spokesperson for Anthropic referred Business Insider to a post on X made last night by Sarah Heck, the company’s head of external affairs.
“American families shouldn’t pick up the tab for AI. In support of the @WhiteHouse ratepayer protection pledge, Anthropic has committed to covering 100% of electricity price increases that consumers face from data centers,” Heck wrote.
Microsoft, Anthropic, and OpenAI have previously announced commitments to covering the costs of electricity consumption at their data centers, though details on those plans remain scant.
Big Tech is building its own power plants
In the last year, on-site power plants fueled mostly by natural gas have emerged as a key strategy for data center developers looking to stay ahead in the AI race. Meanwhile, US power demand has reached record highs.
Utilities in the US last year asked state regulators to approve $31 billion in rate increases, more than double the amount sought in 2024, according to research from PowerLines, a nonprofit advocate for utility customers. Many of those requests occurred in places experiencing heavy data center development, such as Virginia, Texas, Utah, and North Carolina.
Trump has framed data center developers building their own power plants as part of his broader promise to ensure that Big Tech pays for the infrastructure needed to power AI ambitions. For developers, building an on-site power plant can bypass long wait times for a grid connection.
Elon Musk’s xAI is the most prominent example of this. Musk has drawn intense scrutiny in Tennessee and Mississippi, where he has deployed unpermitted mobile generators to quickly get his data centers up and running.
Musk brought his first mobile generators to Memphis in 2024. In the US, dozens of data centers — about 30% of all planned data center capacity in the nation — plan to build their own power plants, according to a report issued this month from Cleanview, a data visualization software company that tracks clean energy and data center projects. Nearly all of that planned capacity — 90% — was added in 2025, Cleanview found.
In a review of permit documents, corporate filings, press releases, and local news stories, Cleanview identified 46 data center projects, many of them already under construction, that plan to draw power “behind the meter” by building on-site, private power plants that don’t need a grid connection or service from the local utility to run.
These include Meta’s plans to build an on-site natural gas plant for its data center in New Albany, Ohio, as well as Oracle and OpenAI’s plans to power their Project Jupiter data center site in New Mexico with two massive natural gas-fired systems.
While Big Tech companies often tout their commitments to clean energy, Cleanview’s review of behind-the-meter permit documents found that natural gas powered 75% of all equipment listed.
Tech companies have said they want to power AI with clean technology, such as small modular nuclear reactors and geothermal energy. Much of it is still years away from being deployed at scale.
Texas is becoming the top state for new data centers
Cleanview found that more than one-third of the behind-the-meter buildout is happening in Texas, which could soon overtake Virginia as the data center capital of the world.
Business Insider has reported on Oracle and OpenAI’s plan to power Stargate data centers in Texas with on-site natural gas plants, as well as Fermi America’s pitch to build the world’s largest combined data center and power plant in the state’s Panhandle region.
After Texas, the top five states with the most planned behind-the-meter capacity are New Mexico, Pennsylvania, Utah, and Wyoming. West Virginia, Tennessee, Ohio, Virginia, and North Carolina also have significant behind-the-meter projects.
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