Data Center Boom Puts Energy Costs on Communities

President Trump said Wednesday that new and large data centers would have to provide their own electricity and give or sell excess power to nearby communities or the grid. The proposal puts energy costs at the center of a fight over who supplies electricity for artificial intelligence.

Who Pays for Power

Trump said the measure would prevent electricity prices from rising. “In fact, there could be a substantial decrease. Other elements likewise!” he wrote on Truth Social. His proposal would require operators to supply electricity for their facilities and make excess power available outside them, but he didn’t specify how the requirement would work.

Dozens of companies, including Meta, Amazon and Google, have agreed to pay higher energy costs caused by their data centers through Trump’s ratepayer protection pledge. The pledge addresses electricity costs, but communities have also raised concerns about pressure on water resources, noise and air pollution.

A medium-sized data center can use up to about 110 million gallons of water a year for cooling, according to an analysis by the nonprofit Environmental and Energy Study Institute last year. That’s equivalent to the annual water use of roughly 1,000 households. One facility can consume as much water as those households use in a year.

Communities and Investment

Trump said data centers had been “highly unpopular in a certain area” but were “extremely popular when a financial deal is struck.” He urged operators: “MAKE DEALS, and get them built!!!” Some communities have received more tax revenue from data centers, while others have used tax breaks to attract investment.

Ohio and Illinois have paused some tax incentive programs in recent months. New York instituted the nation’s first statewide freeze on new “hyperscale” data centers. Those decisions followed public concerns about electricity bills and the effects of facilities on water, noise and air pollution.

During a tight Senate race in Ohio, Trump emphasized how “much money” the state would make as some Ohioans criticized data-center development. At a rally for Sen. Jon Husted (R-Ohio), Trump said: “You can't just turn them off. They'll go to China.” Opponents in Ohio have criticized Husted for wanting to bring data centers to the state while serving as lieutenant governor.

The State's Role

Technology companies argue that data centers are needed to support the development of artificial intelligence. Trump has framed their construction as a source of money for states and said critics want “poverty, crime and squalor,” accusing communities opposing the facilities of wanting to be “backwards and poor.” The dispute brings claims about investment and AI development into conflict with residents’ concerns about local costs and resources.

Opposition to AI has also been driven by concerns about risks from rogue software, particularly after recent attempted and successful hacks into government websites. Those concerns followed a warning from former OpenAI and Anthropic researcher Jacob Coxon that AI could become an existential threat to humanity by the end of the decade. The debate over data centers involves both the demands their electricity and water use place on communities and concerns about the technology they support.