President Donald Trump’s push to make tech companies pay their own electricity costs for data centers could slow the United States in the global AI arms race. Wedbush analysts warn this policy creates a bottleneck for Big Tech just as buildouts accelerate. Microsoft already announced a Community-First AI Infrastructure initiative to cover utility rates and reduce water use, setting a potential template for rivals like Google and Meta.

The political pressure stems from a real squeeze on households. Residential utility bills jumped 6% nationwide last year, with states hosting dense data center clusters seeing much steeper increases. Virginia’s governor-elect demands data centers pay their fair share, reflecting growing community concerns over rising costs and resource strain. Trump’s move aims to shield consumers from picking up the tab, but it risks colliding with the urgent need to build massive power-hungry facilities.

Meanwhile, the AI race is increasingly a clean-energy race. Tech giants are locking in massive power deals: Amazon secured 6.6 gigawatts of nuclear capacity by 2035, Google bought Intersect Power for $4.75 billion, and Microsoft signed a $6.2 billion renewable contract in Norway. Wedbush sees a continuous battle between Big Tech and the administration over who foots the power bill, even as China spends heavily on energy technologies to fuel its own AI ambitions.