US President Donald Trump has announced that Microsoft will be the first company to participate in a new initiative aimed at preventing the energy demands of AI datacentres from increasing electricity bills for American consumers. In a post on Truth Social, Trump stated that tech companies building datacentres must 'pay their own way' and thanked Microsoft for its commitment.
Brad Smith, Microsoft's president, outlined the company's plan at an event near the White House titled Community-First AI Infrastructure. He said Microsoft would pay its property taxes in full and accept neither tax reductions nor electricity rate discounts in towns where it operates datacentres. The initiative also aims to minimise water use and ensure the company's electricity usage does not add to individual utility rates.
Trump has embraced AI during his second term, hosting tech CEOs and signing executive orders to deregulate AI and ease environmental rules for datacentre permitting. However, growing backlash from local communities over rising electricity costs, water consumption, and pollution has prompted a shift in stance. Trump said he is working with other major tech companies to secure similar pledges.
Datacentres, particularly those for AI, consume vast amounts of power and water. A single large-scale facility can use as much electricity as a small city and up to a million gallons of water daily. The International Energy Agency estimates global datacentre electricity demand could double by 2026 from 2022 levels, equalling Japan's annual consumption.
Microsoft's carbon emissions have grown 23% since 2020 due to its expanding AI datacentres. Other tech firms, including Google, Amazon, and Meta, have also seen significant emission increases from the AI boom.
