Microsoft on Tuesday promised that consumers won’t pay more when the software maker sets up data centers near their communities.
The company also committed to replenish more water than it uses and to add to local tax bases in places where it has data centers.
“Our pledge to each of these communities is that we will pay our way as a company, to ensure that our data centers don’t increase your electricity prices,” Brad Smith, Microsoft’s president and vice chair, said at an event held in Great Falls, Virginia, less than 20 miles from the White House.
The company will sign deals with utilities in advance, so they can afford to invest in infrastructure that can support new data centers, Smith said.
Smith made a similar statement in September in Racine, Wisconsin, near a company data center that’s set to come online in early 2026.
“We will pay utility rates that are high enough to cover our electricity costs in part by collaborating with utilities on plans to add the electricity supply that we will need,” Smith said.
The move comes as utility prices rise across the U.S., where technology companies are racing to build data centers that can run generative artificial intelligence models such as the ones that power OpenAI’s popular ChatGPT assistant.
Utilities charged U.S. consumers 6% more for electricity in August from a year earlier, including in states with many data centers, CNBC reported in November.
These facilities contain special-purpose processors that generally require large amounts of energy to operate.
In Caledonia, Wisconsin, where Microsoft was looking to build a data center last year, residents had grievances about water and power use, among other implications.
The company decided not to move forward at the site it had considered in the village, citing local feedback
We Energies, a local utility in Wisconsin, has proposed a special electricity rate for large clients’ data centers, and Microsoft is asking the state’s Public Service Commission to raise the rate the company pays, Smith said.
“We will not go into a local community and ask them to create a local property tax reduction or abatement in order to attract a data center from Microsoft,” Smith said Tuesday.
On Monday, hours before Microsoft’s event, President Donald Trump said in a Truth Social post that his administration has been working with the company, which “will make major changes beginning this week to ensure that Americans don’t ‘pick up the tab’ for their POWER consumption.”
The company has maintained a healthy conversation with the White House going back to Trump’s inauguration last year, Smith told CNBC’s Eamon Javers.
“We really rely on their leadership at the federal level, especially Chris Wright and the Energy Department, Doug Burgum and Interior and across the government,” Smith said on CNBC. Burgum, secretary of the Interior Department and formerly governor of North Dakota, spent six years as a Microsoft executive after the technology company in 2001 acquired Great Plains Software, where he was CEO.
Microsoft CEO Satya Nadella told analysts in October that the company plans to nearly double its data center footprint over the next two years.
Microsoft has been building data centers for over 15 years. In the September quarter, the company spent nearly $35 billion on capital expenditures and finance leases for cloud and artificial intelligence infrastructure, up 75% year over year.
“Our goal is to move quickly, partner with local communities, and bring these commitments to life in the first half of this year,” Smith wrote in a blog post.Â
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