Trump unveils Big Tech pledge to offset rising data center energy costs
President Donald Trump delivers the State of the Union address during a joint session of Congress in the House Chamber at the Capitol on February 24, 2026 in Washington, DC. Kenny Holston-Pool/Getty Images
President Donald Trump’s national address touched on the rising energy costs incurred by increasing AI use, in addition to reinforcing his administration’s imperative to tackle fraud in government programs.
During Tuesday night's State of the Union address, President Donald Trump announced a new initiative to ensure data center owners and operators absorb surges in electricity costs associated with artificial intelligence use.
Trump said he negotiated the agreement, called the Rate Payer Protection Pledge, with major technology companies to pay for their own power needs in a bid to protect against consumers paying higher electricity bills.
“We're telling the major tech companies that they have the obligation to provide for their own power needs,” Trump said. “They can build their own power plants as part of their factory so that no one's prices will go up, and in many cases, prices of electricity will go down for the community, and very substantially down.”
He added that the current grid infrastructure in the U.S. is dated and can’t handle the current and future electricity demands. The solution in the pledge lies in tech companies constructing new power plants to support the energy needs from their individual technologies.
“They're going to produce their own electricity,” Trump said. “It will ensure the companies' ability to get electricity, while at the same time lowering prices of electricity for you, and could be very substantial for all of you, cities and towns; you're going to see some good things happen over the next number of years.”
The question of how to handle the growing demand for energy has become increasingly relevant as the Trump administration strives to keep the U.S. ahead in the global race to AI dominance. Under imperatives from a July AI executive order, the Energy Department has been designating federal lands to support new data center construction.
Industry advocates spoke out in support of the pledge for tech companies to supply their own power needs.
“President Trump knows America must win the AI race,” AI Infrastructure Coalition co-chairs Kyrsten Sinema and Garret Graves said in a statement. “His framework ensures families are not on the hook for the costs of powering the AI future. Companies like Google, Microsoft, Duke Energy, and Georgia Power are already leading the way with commitments to protect consumers. The AI Infrastructure Coalition stands ready to work with the Administration and Congress to deliver on President Trump’s vision.”
Trump also took the opportunity during the State of the Union to announce a new "war on fraud," which is to be led by Vice President JD Vance. The move followed Trump’s January announcement that he was creating a new assistant attorney general focused on fraud. The new Senate-confirmed position will be located in the White House and report to Vance.
Trump fired nearly 20 inspectors general — whose job it is to fight fraud — last year. Experts have told Nextgov/FCW that the administration has made fighting fraud more difficult by making false claims, using fraud as a pretext for political goals and more.
In his speech, Trump cited an unproven fraud tally in Minnesota, pointed to a list of other blue states as "even worse" and placed blame again on the Somali community as perpetrators. The majority of defendants in an ongoing social services fraud scandal in Minnesota are Somali.
The president said that recouping losses caused by fraud could balance the budget, although that is unlikely, as even high estimates of total fraud losses would only amount to less than a third of the 2025 deficit, according to Politifact.