'An Old Grid Cannot Handle the AI Future': President Trump's SOTU Touts On-Site Power for Digital Era

Did microgrids and data center energy parks just get a big boost from President Trump’s State of the Union address Tuesday night?

It sure sounded like it, although turning political verbiage into actionable development is another matter. If nothing else, Trump’s words in the SOTU echoed the concerns of not only the American Society of Civil Engineers (ASCE), which has warned us about our outdated U.S. energy infrastructure for years, but also the worries of residential ratepayers wondering if more than 100 GW of projected new demand from artificial intelligence (AI) factories will strip the affordability away from their own electricity bills.

“We’re telling the major tech companies that they have the obligation to provide for their own power needs,” President Trump said to the gathered U.S. political and business leaders as well as those watching on television and the internet.

“They can build their own power plants as part of their factory, so that no one’s prices will go up, and in many cases prices of electricity will go down for the community, and very substantially down,” Trump added, as quoted in a transcript posted by the New York Times.

Time will tell whether those promises become reality, but the president did boast of recently negotiating the so-called ratepayer protection pledge. Then he started sounding like the ASCE and others pointing out that the utility grid is still too 20th century to meet 21st century challenges.

“We have an old grid,” President Trump said. “It could never handle the kind of numbers, the amount of electricity that’s needed. So, I’m telling them they can build their own plant. They’re going to produce their own electricity. It will ensure the company’s ability to get electricity while at the same time lowering prices of electricity for you, and could be very substantial, for all your cities and towns. You are going to see good things happen over the next number of years.”

Many industry insiders would agree with the president on some levels, but it's also not that simple. AI demand is not like a typical facility load.

"President Trump's recent remarks about the 'old grid' and the need for AI infrastructure to develop its own power echo a challenge the industry has been grappling with for years," said Jim Stoshak, chief resource officer for power conversion solutions firm EPC Power, in exclusive replies to Microgrid Knowledge. "Hyperscale GPU (graphics processing unit) loads are expanding far faster than most regions can build new transmission or generation capacity, driving renewed interest in behind-the-meter and islanded power solutions.

"But constructing dedicated generation is only one piece of the puzzle," EPC Power's Stoshak pointed out. "AI-class GPU workloads create rapid, high-magnitude power swings that place significant stress on traditional islanded systems. In these environments, reliable operation depends on advanced control architectures and fast, precise energy buffering, not just additional megawatts."

AI infrastructure developers such as CyrusOne, Fermi America and Fidelius are banking on the need to build co-located, even off-grid power facilities to beat slow utility interconnection delays. Hyperscalers such as Google, Meta and Microsoft are seeking next-gen power purchase deals that could involve not only distributed energy resources such as solar and wind, but also gas-fired and nuclear power.

“Speed to power” is becoming a mantra for tech and energy industry intersection. “Generate or perish” might be another critical adage promising the longtime utility commercial and industrial customer model is changing for the next several decades.

Trump isn’t the only politician paying attention. Nearly a year ago, Oklahoma Gov. Kevin Stitt signed into law a “behind the meter” bill which reportedly empowers businesses to become their own utilities and develop their own power projects.

West Virginia state leaders and Gov. Patrick Morrisey enacted their own “microgrid bill.” This legislation, and the economic development spirits it might unleash, encouraged developer Fundamental Data to begin its own plans for gas-fired power generation to energize AI and cloud-based computing centers.

During last fall’s Schneider Electric Innovation Summit North America event in Las Vegas, numerous industry leaders, from companies such as NVIDIA, FedEx and BlackRock’s Global Infrastructure Partners, stressed that they did not think the AI hype was a bubble. Many companies are already adopting generative and agentic AI for most of their business functions, it was noted.

“I didn’t know the AI revolution was coming, but it did come,” FedEx CEO Raj Subramaniam admitted at the Schneider Electric Innovation Summit.

Forecasters from Goldman Sachs to McKinsey are predicting more than 100 GW of new generation needed just to meet growing AI and data center demand by the early 2030s. While this is an opportunity for microgrid developers and generators to up their game, if they don't handle this carefully it could detrimentally impact everyday ratepayers, to the president’s earlier point.

Mark Christie, former chairman of the U.S. Federal Energy Regulatory Administration, said that electricity load has been lately growing five to six times faster than the commissioning of new generation capacity. This warp speed of demand over supply could produce a real human crisis in coming years, from energy unaffordability to access to reliable energy for the individual.

“We are sitting on a volcano,” Christie said during the Innovation Summit, quoting an old line by French writer Alexis de Tocqueville about his country on the brink of a revolution. He worries that the same thing could happen if America doesn’t get a handle on how to adequately power energy-hungry AI and a growing population.

“The political volcano could be from energy prices, and we’ve got to address that,” Christie added. “We cannot forget that what retail customers are paying is going to be a huge part of it. If we don't, the volcano could blow up, and it could be bad.”

For context about SOTU hype, it should be noted that President Trump’s SOTU offered only a few hundred words about AI and energy resources out of many thousands of words spoken in the lengthy address on many topics. As for AI and energy, the dynamic is well-known to all who cover the distributed energy and microgrid sector.

The president so far has been regulatorily and legislatively friendly mainly to centralized and fossil or nuclear-powered energy resources. Microgrids and energy parks will often include multiple resources such as solar and battery storage, according to their tech customers’ wishes.

The future will judge these words by how true they becom. If done right or wrong, the looming energy challenge from AI and automation can make for a boastful few paragraphs of accomplishment in a future SOTU, or a harsh rebuke to the lack of action by the current president and leaders. Either way, the issues are timely and mission critical by nearly all expert accounts, so actions will speak louder than words in the years ahead.