The Donald Trump administration, along with several U.S. Northeast governors, has urged PJM Interconnection LLC, the nation’s largest grid operator, to hold an emergency power auction in which Big Tech companies would bid for new power plants. The directive is expected to be issued today, January 16, as a “statement of principles” signed by Trump’s National Energy Dominance Council and the governors of Pennsylvania, Ohio, Virginia, and several other states.
Claim 70% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
The directive would mark a remarkable intrusion into the nation’s power markets and would underscore growing concern over rising electricity prices. The rapid build-out of data centers in the areas serviced by PJM is straining the grid’s capacity. AI-fueled data center boom is driving up costs in several recent power auctions run by the grid operator.
Details of the Emergency Power Auction
Under the auction, tech companies including Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Meta (META), and OpenAI could bid on 15-year contracts for new power generation. These deals would potentially result in new power plants worth $15 billion, according to a White House official.
PJM operates in 13 states, spanning the Mid-Atlantic to the Midwest, and serves more than 67 million people. Trump’s directive aims to address surging electricity demand that far outpaces supply, as well as concerns about powering AI-critical data centers to secure U.S. dominance in the global race, all without driving up consumers’ utility bills.
The global AI race consumes far more power than prior cloud-computing waves. According to the Wall Street Journal, an AI training data center can use as much electricity as 1,000 Walmart (WMT) stores, and a single AI search uses 10 times the energy of a Google search. Some analysts argue that data centers’ impact on electricity prices is overstated, pointing instead to rising demand from manufacturing and general inflation.
Trump Aims to Make Big Tech Accountable
Earlier this week, Trump stated on Truth Social, “I never want Americans to pay higher Electricity bills because of Data Centers.” He noted that the administration is collaborating with U.S. tech companies on the matter and “will have much to announce in the coming weeks.”
Federal regulators could speed up data center grid connections, enabling faster development of their own power supplies. Officials argue this rule would spur growth as AI leaders like Google, Amazon, Meta, and OpenAI fund new power plants to ease generation bottlenecks.
Which Is the Best Artificial Intelligence Stock?
We used the TipRanks Stock Comparison Tool for Best Artificial Intelligence Stocks to determine which stock is currently most favored by analysts.
Wall Street has assigned a “Strong Buy” consensus rating on most of the companies, with chip giant Nvidia (NVDA) offering the highest upside potential over the next twelve months.
