US President Donald Trump first announced the initiative late Monday on Truth Social, saying his administration had been working with technology companies to ensure they "pay their own way" for power consumption.

"I never want Americans to pay higher Electricity bills because of Data Centers," Trump wrote.

Ahead of midterm elections in November, the increase in electricity bills has become a hot-button issue across the country, with tech companies multiplying major data center projects to meet their AI ambitions.

US data center electricity consumption is projected to more than triple by 2035, according to the International Energy Agency, and already covers six to eight percent of US electricity use.

To meet the demand, utilities sometimes need to build new power plants, upgrade transmission lines, or expand grid capacity -- investments that usually get passed on to all customers through rate increases.

Microsoft said Tuesday it will work with utilities and regulators to ensure residential customers are not charged for the massive infrastructure investments needed.

"Especially when tech companies are so profitable, we believe that it's both unfair and politically unrealistic for our industry to ask the public to shoulder added electricity costs for AI," Microsoft President Brad Smith wrote in a blog post.

The company outlined a four-point plan including paying higher rates that cover infrastructure costs and collaborating early with utilities on how to pay for grid expansion.

Microsoft pointed to deals in Wyoming and Wisconsin as models, where the company has structured agreements that protect residential ratepayers.

The move comes as the United States faces aging electricity infrastructure and supply chain bottlenecks, with new transmission projects taking seven to 10 years due to permitting delays.

Trump said more announcements from other technology companies would follow "in the coming weeks."

Microsoft also said it will replenish more water than its data centers withdraw, responding to growing concerns that AI infrastructure is straining local water systems.

This would be done through leak detection programs, wetland restoration and water infrastructure upgrades, the company said.

AI data centers run chips at extremely high temperatures that would burn out within minutes without proper cooling, usually provided by locally supplied water.

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