Microsoft indicated on Tuesday that it plans to pay more for electricity used to fuel artificial intelligence data centers so that residents don’t have to bear the brunt of the costs.
Brad Smith, vice chairman and president of Microsoft, announced the news on Tuesday morning in a blog post and at a live event.
“We’ll ask utilities and public commissions to set our rates high enough to cover the electricity costs for our datacenters,” Smith wrote.
“This includes the costs of adding and using the electricity infrastructure needed for the datacenters we build, own, and operate. We will work closely with utility companies that set electricity prices and state commissions that approve these prices,” he continued. “Our goal is straightforward: to ensure that the electricity cost of serving our datacenters is not passed on to residential customers.”
The announcement comes shortly after President Donald Trump said major technology companies will begin paying utility bills as they expand their data centers nationwide. Trump noted that he has been in touch with Microsoft about this matter and teased the company’s announcement this week.
“I never want Americans to pay higher Electricity bills because of Data Centers,” he wrote on Truth Social on Monday evening. “First up is Microsoft, who my team has been working with, and which will make major changes beginning this week to ensure that Americans don’t ‘pick up the tab’ for their POWER consumption, in the form of paying higher Utility bills.”
In pursuit of that goal, Microsoft said it will work with utility companies to add electricity to the electrical grid when needed and develop ways to reduce energy use. Additionally, the tech company will advocate state and federal policies to support its mission of making power consumption at data centers more affordable for everyone.
Furthermore, Smith pledged to replenish more water than Microsoft uses in response to local residents’ concerns about the vast amounts of water used to cool AI data centers. He also promised to add to the tax base for local hospitals, schools, parks, and libraries in areas where its data centers are located.
Smith invoked the nation’s 250th anniversary while announcing the different pledges, demonstrating Microsoft’s commitment to collaborating with the Trump administration.
Trump is in favor of data centers as his administration races to build the nation’s AI infrastructure. He views the rapid expansion of data centers as a viable way to lower high electricity prices, one aspect of the president’s refocus on affordability ahead of the 2026 midterm elections.
TRUMP SAYS MAJOR TECH COMPANIES WILL PAY FOR AI DATA CENTER POWER CONSUMPTION
Utility bills for consumers increased by a national average of 5.2% in 2025 compared to the prior year, according to the U.S. Energy Information Administration.
Trump seems to be in agreement with Gov. Kathy Hochul (D-NY) on the energy matter involving data centers and electricity costs. On Tuesday, Hochul is expected to announce an initiative designed to ensure that data centers pay for their power consumption, rather than consumers. Hochul will make the announcement during her annual State of the State address, which is scheduled to start at 1 p.m. on Tuesday.
