President Donald Trump is intervening in the nation’s power grid operations as the explosive growth of AI data centers drives electricity prices higher for American consumers. Trump, alongside governors from northeastern states, is pressuring PJM Interconnection—the country’s largest power grid operator serving 13 states—to hold a new power auction that would require major tech companies to fund new power plants directly.
According to the Department of Interior, a “coalition of leading technology companies” has already committed to funding new generation capacity, though specific companies remain unnamed. The push comes as AI-powered data centers consume massive amounts of electricity, creating strain on existing power infrastructure and driving up costs for residential and business customers.
Pennsylvania Governor Josh Shapiro issued a stark warning at the announcement event: “Make no mistake, if PJM, this faceless bureaucratic organization that is driving prices up on the American people, does not change, and does not reflect what we are putting forth here today, Pennsylvania will be forced to act, and forced to go at it alone.”
The Trump administration’s proposal includes several key reforms outlined in a Department of Energy fact sheet: providing 15-year revenue certainty for new power plants, capping charges from existing power plants, and requiring data centers to directly pay for new power infrastructure built on their behalf. These measures aim to isolate AI data center energy costs from the broader consumer market.
PJM Interconnection responded cautiously to the White House directive. Spokesman Jeffrey Shields stated the company is “reviewing the principles set forth by the White House and governors” and would assess how the directive aligns with their board’s decision following a “multi-month stakeholder process on integrating large load additions.”
Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School, acknowledged the complexity of the situation: “The intent here is correct, which is to appreciate that data centers are driving up prices in PJM, and an attempt to remedy that for consumers. It is meant to isolate data centers from the rest of the market, and, in theory, that seems like a workable approach; but these markets are really complicated, and it’s hard to predict how this all shakes out.”
Trump emphasized his broader commitment on Truth Social, stating his administration is “working with major American Technology Companies to secure their commitment to the American People.” Microsoft has already responded, releasing a plan Tuesday that includes requesting higher utility rates for the company to keep consumer costs down. Other major tech companies are expected to announce similar commitments in coming weeks.
Key Quotes
Make no mistake, if PJM, this faceless bureaucratic organization that is driving prices up on the American people, does not change, and does not reflect what we are putting forth here today, Pennsylvania will be forced to act, and forced to go at it alone.
Pennsylvania Governor Josh Shapiro issued this warning at the White House announcement event, demonstrating the political pressure mounting on the power grid operator and signaling that states may take unilateral action if PJM doesn’t comply with the administration’s demands.
The intent here is correct, which is to appreciate that data centers are driving up prices in PJM, and an attempt to remedy that for consumers. It is meant to isolate data centers from the rest of the market, and, in theory, that seems like a workable approach; but these markets are really complicated, and it’s hard to predict how this all shakes out.
Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School, provided this analysis to Business Insider, acknowledging the administration’s goals while cautioning about the complexity of power market reforms and uncertain outcomes.
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.
President Trump posted this statement on Truth Social, emphasizing that tech companies must “pay their own way” and signaling that additional announcements about corporate commitments to fund AI infrastructure are forthcoming.
Our Take
This represents a watershed moment where AI’s physical infrastructure demands are colliding with political and economic reality. For years, the AI industry has focused on algorithmic breakthroughs while treating energy as an unlimited resource. That era is ending. The Trump administration’s intervention—backed by bipartisan governor support—shows that AI’s energy appetite has become politically untenable.
What’s particularly significant is the market-based solution being proposed: rather than limiting AI development, the administration wants tech companies to fund dedicated generation capacity. This could actually benefit AI leaders like Microsoft, Google, and Amazon by providing long-term energy certainty, while smaller AI startups may struggle to secure power access. We’re potentially witnessing the creation of a two-tier AI economy divided by energy access. Microsoft’s quick response with a concrete plan suggests major players anticipated this pressure and are prepared to pay—but this fundamentally changes AI economics and may slow the breakneck pace of expansion we’ve seen recently.
Why This Matters
This development represents a critical inflection point in the AI infrastructure boom, highlighting how the technology’s explosive growth is creating real-world economic and political consequences. As AI companies race to build larger language models and expand their services, the energy demands of their data centers are no longer an abstract concern—they’re directly impacting electricity bills for millions of Americans.
The intervention signals that AI’s infrastructure costs are becoming a political liability that requires government action. By forcing tech companies to fund dedicated power generation, the administration is attempting to prevent AI development from becoming a burden on ordinary consumers. This could fundamentally reshape how AI infrastructure is financed and deployed.
The outcome will likely influence AI development timelines and costs across the industry. If tech companies must shoulder the full infrastructure burden, it could slow expansion or concentrate AI capabilities among only the most well-funded players. Conversely, dedicated power sources could actually accelerate AI development by providing reliable, long-term energy certainty. This precedent may also spread beyond PJM’s territory, affecting AI infrastructure planning nationwide and potentially globally.
Related Stories
- Groq Investor Warns of Data Center Crisis Threatening AI Industry
- Nvidia CEO Jensen Huang Reveals Public Speaking Struggles Despite AI Success
- Meta and Nvidia Billionaires’ Wealth Soars $152B in AI Boom
- Big Tech’s 2025 AI Plans: Meta, Apple, Tesla, Google Unveil Roadmap
Source: https://www.businessinsider.com/trump-power-plant-auction-tech-companies-governors-2026-1