U.S. electricity grid stretches thin as data centers rush to turn on onsite generators
Secondly, Microsoft committed to reducing the amount of water that its data centers use, and will ensure that it replenishes any supply used through various short-term and long-term projects.
Aside from electricity and water supply concerns, the tech giant also gave assurances that it will invest in the local population. This includes immediate initiatives, like training local populations for employment within data centers in construction and maintenance, in addition to longer-term undertakings, including AI-focused training for students and teachers in the community, as well as AI skill-building programs in local libraries.
Finally, the company promised that it would “add to the tax base,” paying its fair share of property taxes to give municipal governments the funds to build local infrastructure like hospitals, schools, libraries, parks, and more.
While these are big public commitments, it remains to be seen whether Microsoft might be able to deliver on them. The company is laying out a longer-term vision for how it might support the communities it is building around. The company has also commented that it's already seen results in various municipalities: namely, Quincy, Washington, Boydton, Virginia, and Mt. Pleasant, Wisconsin. Additionally, the company also canceled its plan to build a data center in Caledonia, Wisconsin , after backlash from the local populace.
Even though Microsoft is taking the lead, it’s not a guarantee that other companies will follow suit. xAI has already ruffled feathers with the surrounding community of its Colossus site, as allegations surfaced that it was using illegal generators to power the site . OpenAI was also under scrutiny when the regulatory body in Detroit, Michigan, gave the local power company the green light to deliver 1.4 gigawatts to the Stargate data center without a hearing .
If Microsoft's promises hold, investing in the local populace will likely result in increased costs, and even though many AI hyperscalers are cash-rich at the moment, some experts are already calling out the amount of money poured into AI spending . Because of this, it’s unlikely that tech companies will start pouring resources into the community — that is, until it becomes a legal obligation to do so.
AI's aggressive infrastructure scaling has been a hot-button issue for politicians. Three Democratic U.S. Senators have called out Amazon, Google, Meta, Microsoft, and others about their outsize impact on electricity costs, while Senator Bernie Sanders wanted to halt all AI data center construction to ensure that they benefit “all of us, not just the 1%.” More recently, President Donald Trump said that AI tech companies need to “pay their own way” and not let Americans “pick up the tab” for their electricity consumption.
Although we’re still waiting for concrete actions from the federal government on how it will address the electricity issue, this is one of the few times in recent memory that both sides of the political spectrum are raising similar concerns. If Congress were to pass a law or the White House released an executive order that forces tech companies to be more accommodating to the local populations, the industry would have no choice but to comply.
Initiatives like Microsoft’s “Community-First AI Infrastructure” might help prepare the industry for a more sustainable future, but it must be a concerted effort from both companies and governments to ensure that AI benefits more than just the companies building data centers.
Jowi Morales is a tech enthusiast with years of experience working in the industry. He\u2019s been writing with several tech publications since 2021, where he\u2019s been interested in tech hardware and consumer electronics. ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-11/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Jowi Morales Social Links Navigation Contributing Writer Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/microsoft-built-a-community-first-ai-infrastructure-framework-for-its-data-center-projects-new-policy-may-be-the-blueprint-for-u-s-hyperscalers-to-follow#main
- https://www.tomshardware.com
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Informational only. No financial advice. Do your own research.