US Data Center Industry Warns of Slowdown Amid Trump Administration's Renewable Energy Crackdown
The US data center industry has expressed concerns that the Trump administration’s recent actions against renewable energy could hinder its growth, complicating efforts to meet the surging energy demands of artificial intelligence (AI) and cloud services as reported by Financial Times.
Impact on Data Center Growth
The demand for power to fuel AI and data centers is rising rapidly, with the industry expecting to add 83.7 gigawatts of energy demand by 2030, roughly equivalent to adding a new state the size of Texas to the grid.
However, recent policies under the Trump administration, including the suspension of clean energy developments on federal land and the cancellation of major projects like Equinor’s $5 billion Empire Wind site, have raised alarms.
Experts warn that these moves could lead to power shortages, increasing costs, and delays in data center development, which could impact the broader AI race.
Challenges in Energy Supply
Simon Ninan, senior vice-president at Hitachi Vantara, said, “Strategically, the US could risk undermining its current pole position in the global AI race... China, on the other hand, has taken a proactive approach towards grid modernization and efficient power distribution.”
Fossil Fuels vs. Renewables
While the Trump administration has advocated for increased use of fossil fuels to power AI-related infrastructure, experts argue that meeting the massive energy demand requires more renewable energy capacity.
Renewable sources are cheaper and faster to deploy than traditional fossil fuel plants, and delays in bringing new renewable energy projects online could lead to a reliance on higher-cost, dirtier energy sources.
Also read: Brazil's Clean Energy Edge in the AI Race
State and Local Impacts
Pressure is also coming from attempts to limit renewable energy projects at the state and local levels. In Texas, legislation is being considered that would raise the regulations on solar and wind energy projects, which could slow the rapid growth of data centers in the state.
Doug Lewin, Stoic Energy president, pointed to the great potential for data centers in states such as Texas, but added that regulatory restrictions would be the death knell for this expansion.
With the need for renewable energy at an all-time high, corporations such as Amazon and Equinix are demanding greater access to clean sources of energy to balance their emissions and achieve sustainability targets.
Kevin Miller, Amazon Web Services' vice-president of Global Data Centers, emphasized that renewable energy tends to be cheaper because it has no fuel costs, so it is vital to serve the energy needs of AI and data center operations.
But experts warn that with rising regulatory constraints, it will prove difficult for hyperscale data centers to keep growing their operations without the requisite sources of renewable power.
