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US Considers Power Shutdowns for Big Tech Data Centers Amid AI Surge

Data Centers

Business Honor
17 September, 2025

Policymakers weigh new rules to protect power grids from surging data center demand.

The explosive expansion of Big Tech data centers, essential for cloud services and training AI models, is straining US power grids to the breaking point, raising concerns about electricity shortages during peak usage times. Policymakers, reacting, are considering new rules that could mandate shutting down data centers from the grid in times of crisis so that homes and hospitals remain powered. Texas has already done so, enacting a law in June that requires shutting down large electricity consumers, such as data centers, during extreme demand periods. The action follows the 2021 winter storm that killed hundreds and caused mass blackouts. Other areas are now following, including PJM Interconnection covering 13 mid-Atlantic states, due to fears that the recent proliferation of data centers will overburden power grids in the next few years.

The increasing power demand, fueled by the AI boom and applications such as OpenAI's ChatGPT, has seen data center projects spring up in almost 20 states. Experts have warned that unless new regulations are put in place, increasing power demand may drive electricity bills even higher and further stress the grid. In turn, Big Tech firms are spending money on backup diesel generators to ensure their operations continue when the grid fails. But some industry organizations believe that mandated shutdowns during emergencies would damage their business models and destabilize data center expansion. The debate has led to a broader discussion of who should pay for the energy use of these large facilities. While some are pushing data centers to construct their own power plants, others argue that the grid cannot be expected to handle the needs of AI. As the US navigates these questions, the tension between energy sustainability and technological advancement remains an ongoing challenge.