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Dow Jones NewsNov 5, 1:05 PM UTC
MW AI companies have money and momentum. But look who's stuck with their utility bill.
By Matt Rogers
Big Tech's data-center expansion efforts are spurring rate hikes for consumers. They don't have to stand for it.
A study found that U.S. utilities have requested $29 billion in rate hikes in just the first nine months of this year.
America's power grid hasn't been upgraded to withstand such intensive use.
Big Tech's impact is being felt on Main Street, but not because of the latest gadget to hit the shelves. More than half of Americans are now on the hook for spending up to twice the annual rate of inflation on utility bill increases.
The culprit: Big Tech's ambitious data-center expansion efforts, and tech companies' pressure on utilities to handle surging AI power demand.
Big Tech is expected to shell out a record $364 billion for AI investments this year. These AI companies have vision and money from backers and venture partners. But ordinary Americans are footing their utility bill. Research from Rewiring America found that utilities have requested $29 billion in rate hikes in just the first nine months of this year.
It remains unclear if America's power grid and communities can withstand the increased capacity demanded by the AI revolution. The problem lies not only in the cost to Main Street from higher bills, but also the rising possibility of power blackouts and system unreliability - America's power grid hasn't been upgraded to withstand such intensive use.
Data-center capacity will need to increase at least 50% by 2027 and up to 165% by 2030 to handle AI and cloud demand.
Data-center capacity will need to increase at least 50% by 2027 and up to 165% by 2030 to handle AI and cloud demand. Research from Rewiring America puts the capacity required for data centers planned or already under construction to grow 128 gigawatts by 2029 (+16% compared to peak demand in 2025). Tech giants including Meta Platforms (META), OpenAI, Nvidia (NVDA) and Oracle (ORCL) will need to budget roughly $1.8 trillion from now through 2030 just to pay for increased capacity powering AI and cloud infrastructure.
OpenAI CEO Sam Altman predicts that nuclear fusion will solve America's energy-grid struggles by 2028. But Altman famously said nuclear fusion would be available in the form of "mass-producible nuclear generators" by 2024. That didn't happen.
While nuclear fusion might solve energy-grid problems in the distant future, it could take decades to play out based on practical and recent history. It took 11 years to build and bring America's newest nuclear reactor in Vogtle, Ga., to the point of commercial operation.
Rate hikes are likely to continue for Americans unless something changes.
Rate hikes are likely to continue for Americans unless something changes.
Solving America's grid strain requires more than massive new power stations. Decentralized infrastructure solutions are available now, such as rooftop solar and energy storage, and distributed energy resources including heat pumps and smart thermostats. These can come online quickly; they're cost-effective and avoid major disruptions to community grids across the nation. This is much faster than permitting and building a power plant.
Communities hold more leverage over Big Tech than they think.
Meanwhile, communities hold more leverage over Big Tech than they think. Tech companies want a faster, more predictable path to build. Local and state governments want affordability, economic acceleration and resilience. While tech has the funds, municipal policymakers and regional utilities hold the power to broker deals that make data-center investments mutually beneficial. Communities are in a unique position to offer swift permitting and flexible construction timelines in exchange for economic rejuvenation, tax revenue and job creation.
Tech investment needs to fund Main Street through household upgrades including heat pumps, rooftop solar and energy storage, By enabling more efficient households, Big Tech's hyperscalers can access the energy they need to operate AI data centers, and get it faster. The right deals - incorporating market solutions, community incentives and municipal partnership - can make progress happen in months and years, not decades.
Matt Rogers is co-founder & CEO of Mill, a waste prevention technology company based in San Bruno, Calif., and the co-founder of Incite.org, which invests in early stage companies. Rogers is also a co-founder of Nest, now a subsidiary of Alphabet.
More: Big Tech is spending on power for AI - whether Washington functions or not
Plus: The AI boom is over - here's your bubble survival guide
-Matt Rogers
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11-05-25 0805ET
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