Microsoft President Brad Smith met with federal lawmakers Tuesday to push for Big Tech to pay the full costs of AI data centers instead of taxpayers, as opposition from local communities has intensified around electricity and water impacts. Smith said his effort is meant to address concerns that new data-center construction can strain electric grids and divert water resources, while still bringing jobs.
The push is being advanced as the Trump administration signals support for shifting costs away from the public. In a Truth Social post Monday evening, President Donald Trump said he does not want Americans to “pick up the tab” for these data centers and pay higher utility costs, according to the Associated Press report.
In an interview edited for clarity and length, Smith told AP that communities want economic benefits from projects but not at the expense of higher household bills or water diversion. “Local communities naturally want to see new jobs but not at the expense of higher electricity prices or the diversion of their water,” Smith said in the interview.
Smith described electricity as the central “heavier lift” for data-center operators. He said, “We don’t use nearly as much water as we do electricity. Electricity is a heavier lift. It’s a larger investment,” adding that it follows decades in which U.S. electricity production was “basically flat.” He said the company’s approach involves partnering with utilities and “paying our own way,” arguing that working through utility commissions is necessary for local approvals.
On the question of whether the public should contribute to the upgrades needed to serve data centers, Smith said Microsoft does not think “the public should be devoting tax dollars” for grid improvements. He said private companies can incorporate those costs into financial planning, including investments on transmission and substations.
Smith also addressed Microsoft’s climate and clean-energy goals in the same interview. He said the company set a goal in 2020 of being “carbon-negative by 2030” and that it has not changed course, stating that it aims to reduce emissions and then remove “each year, beginning in 2030, more carbon than we emit.” He said the company invests in adding carbon-free energy sources to regional grids, including “nuclear, solar, hydro or others,” while also working with utilities to ensure cleaner natural gas when that is the power supply.
In Wisconsin, where Smith grew up, the Associated Press reported that Microsoft has faced hurdles expanding data centers near Lake Michigan. The company has promised the centers will employ hundreds of people once completed, while Democratic Gov. Tony Evers has promoted the projects as putting Wisconsin “on the very cutting edge of AI power,” the report said.
The AP story also described opposition from environmentalists and consumer groups. It said those critics warn that the centers could consume unprecedented amounts of electricity and could use hundreds of thousands of gallons of Lake Michigan water daily, while company officials have pledged the projects’ impact will be minimal and that they will contribute carbon-free energy to the power grid.
Some of the friction has also centered on how costs and payments flow between developers, governments and residents. The AP reported that in Hobart, Indiana, the City Council approved a tax-abatement package for a multibillion-dollar Amazon data center, including two payments of $5 million each for issuing building permits and additional milestone-based payments totaling $175 million over three years. Opponents in Hobart said the money unduly influences city officials’ decision-making, the report said.
Smith also weighed in on calls to pause Wisconsin data center approvals until the state has a broader energy plan. He said he is supportive of Wisconsin developing a comprehensive electricity plan and told AP, “I don’t think our project should be paused to wait for that.” He said Microsoft is partnering to build out and improve the electricity grid in southeastern Wisconsin and described a rate tariff proposal that would impose additional costs on Microsoft that the company would help pay for in the state. He also cited investment plans including “a 150-megawatt solar farm.”
In the AP report, Clean Wisconsin called for government officials to pause data center approvals until Wisconsin develops a comprehensive regulation plan. The story said Democratic candidate Francesca Hong developed a proposal called “CONTROL ALT DELETE” that includes a moratorium on new data center construction until there is a plan to “protect ourselves from their environmental and energy costs,” with Evers not seeking re-election in November.
Todd Richmond, an AP writer in Madison, Wisconsin, contributed to the report.