Three U.S. Senators — Elizabeth Warren, D-Mass., Chris Van Hollen, D-Md., and Richard Blumenthal, D-Conn. — are looking at how AI data center operations across the country are impacting the cost of electricity for the average American consumer. According to The New York Times, the legislators sent letters to seven tech companies, including Amazon, Google, Meta, Microsoft, CoreWeave, Digital Realty, and Equinix, saying that the massive power demands of the AI data centers they’re building have forced utility companies to spend billions of dollars to upgrade their systems.
“We write in light of alarming reports that tech companies are passing on the costs of building and operating their data centers to ordinary Americans as A.I. data centers’ energy usage has caused residential electricity bills to skyrocket in nearby communities,” the letter said. It also mentioned that “Utility companies have spent billions of dollars updating the electrical grid to accommodate the unprecedented energy demands of A.I. data centers and appear to recoup the costs by raising residential utility bills.”
Many big tech companies are investing in energy infrastructure to support their growth. But because most of the contracts between them and energy providers, it’s difficult for the public to ascertain whether the recent price hikes were caused by the infrastructure build-out for AI data centers or by the utility companies’ own upgrade programs. After all, aside from needing to build additional power lines, substations, and power plants to support all these new data centers, they also need to replace older facilities and harden equipment in the face of threats caused by changing conditions, like wildfires.
Electricity is the bottleneck that the AI industry is currently facing, especially as the U.S. aims to outpace China in the development of this technology. The East Asian country recognizes the importance of power generation in this race, with some experts warning that it’s already miles ahead, as the U.S.’s lack of supply and infrastructure is setting it back in its long-term AI plan. It has even gotten to the point that Nvidia CEO Jensen Huang commented that “China is going to win the AI race” because of issues with electricity in the U.S.
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