President Donald Trump already faced the difficult task of convincing American voters that he had a plan to protect Americans from the power costs of the data center boom.
Then the bombs started falling.
Market turmoil following President Trump’s attack on Iran and concerns about escalating conflict are sure to overshadow Wednesday’s signing ceremony with seven major tech companies at the White House. Seven major tech companies have pledged to help pay for the growing demand for electricity driven by artificial intelligence.
And if U.S. natural gas prices rise over the long term due to a surge in U.S. fuel exports to replace Middle East gas, which is currently in short supply in Europe, electricity prices could rise, making President Trump’s pledge to lower electricity rates difficult. Meanwhile, Republicans on Tuesday largely dismissed concerns about the energy costs of fighting in Iran, highlighting a key rift with Democrats who want to make rising costs a midterm election issue.
Even without a war, energy market experts expressed doubts about whether promises from tech companies could curb the sharp rise in power prices. The plan uses the White House’s bullish pulpit to signal a preferred approach to tech companies and utility regulators, but it is not enforceable at the federal level, said six people familiar with the plan through conversations with industry and administration officials.
One complication is that most electricity supplies are regulated at the state level and administered regionally, with market structures that vary widely in different parts of the country.
“I don’t know if this will solve a lot of things,” said one of the people familiar with the deal. Like other stakeholders, they are granted anonymity to discuss personal details. “They’re trying to take a lot of the things we’re already doing and give them credit for their time.”
Still, executives from major tech companies such as Amazon, Google, Meta, Microsoft, xAI, Oracle, and Open AI are scheduled to be at the White House on Wednesday.
President Trump has given mixed signals about how much teeth the expected non-binding deal will have. In his State of the Union address on February 24, President Trump said he would direct tech companies to “build their own factories and produce their own electricity,” in what he called a “pledge to protect ratepayers.” But he said at an event Friday in Corpus Christi, Texas, that the deal would be “essential.”
“We’re requiring communities that have to build their own power plants to make sure they’re not excluded from their communities,” President Trump said Friday. “And the surplus is fed back into the grid, so instead of harming it, it actually strengthens it.”
The White House has not provided details on whether it intends to make these pledges binding, leaving many unanswered questions heading into Wednesday’s event. A White House press secretary declined to comment, but pointed POLITICO to remarks the president made on Tuesday.
“Even if oil prices stay a little high for a while, as soon as this is over, oil prices will fall and be lower than they were before,” President Trump said during a meeting with German Chancellor Friedrich Merz.
Very little of America’s electricity comes from oil. The United States’ largest source of electricity so far is natural gas, and the United States not only produces this fuel in abundance, but also exports vast quantities.
The pledge comes at a critical time for the administration, as rising electricity prices pose a challenge to Trump’s economic policies. Communities across the country are increasingly opposed to data centers due to concerns about water consumption, air and noise pollution, as well as concerns about rising electricity prices. This opposition has been a winning issue for some successful Democratic candidates in recent elections in Georgia, Virginia and New Jersey.
Nick Elliott, senior adviser to the White House National Energy Governance Council, said the pledge aims to address both affordability concerns and the “insatiable demand” for energy to power AI.
“I can’t understate how many times I get questions from the West Wing about affordability. That’s the biggest thing,” Elliott said Tuesday at the Electric Power Supply Association conference in Washington.
Elliott said the pledge will encourage tech companies to bring new generation sources online to fuel data centers, rather than simply locating them near existing power sources. The move is to ensure the power grid has additional supply to accommodate energy-hungry data centers.
He said the pledge would create room for tech companies to do business with power companies and enter into bilateral agreements with independent power companies.
The agreement, echoed by other officials who spoke to Politico, is expected to encourage tech companies to pay for additional power to power data centers, fund grid upgrades and commit to minimum power purchases to prevent sudden spikes in consumer prices. Companies like Microsoft, Anthropic, and Google have already undertaken similar degrees of voluntary efforts in recent weeks.
