Technology giants "dig into their own pockets" to pay electricity bills! Wedbush warns: may slow down data center construction progress.

On March 4th local time, executives from seven tech giants including Amazon.com, Inc. (AMZN.US), Alphabet Inc. Class C (GOOGL.US), Meta (META.US), Microsoft Corporation (MSFT.US), xAI, Oracle Corporation (ORCL.US), and OpenAI attended a meeting at the White House and signed a document called the "Electricity Payer Protection Commitment." However, Wedbush, a investment bank, pointed out that this commitment aimed at covering the rising electricity costs may become a significant bottleneck and rapidly slow down the construction progress of large data centers. It is reported that these companies signed a non-binding five-point agreement, committing to ensure electricity supply for their energy-intensive data centers currently under construction, which are a part of their large-scale artificial intelligence strategy. They promised to build or purchase additional electricity supply facilities, pay for related infrastructure upgrade costs, and negotiate separate electricity price structures with electricity companies and state governments where the data centers are located. Trump stated that these largest tech companies in the US have committed to sharing the electricity costs related to artificial intelligence development, which will benefit the public, but this could take some time. The White House stated on Wednesday: "President Trump is calling on Americas leading hyperscale cloud providers and artificial intelligence companies to build, introduce, or purchase all the energy required to construct and operate data centers, and to cover all costs of their energy and infrastructure." In response, analysts led by Dan Ives of Wedbush stated, "While this move eases a major headache for the Trump administration just ahead of the crucial midterm election cycle, it will be a significant bottleneck for large tech companies that want to expand their large-scale data center footprint rapidly without impacting profitability. The US is at a critical moment in the artificial intelligence revolution, and the energy supply needed for data center construction is facing clear shortages and challenges, which may slow down the pace of data center construction." The analysts added that despite the Trump administration viewing the AI revolution as a key pillar of economic growth and national security and actively promoting it, the cost of living is continuously increasing. They pointed out that the average electricity prices in the US are expected to rise by 7% by 2025, and with data center demand growing faster than electricity supply, the price increase is projected to reach 6% by 2027. Ives and his team stated that many communities have already rejected plans to build data centers locally. This is because the costs associated with financing these long-term projects and strengthening the electricity grid infrastructure are being passed on to American families, even as these companies are building their own power generation capacity.