AI Infrastructure
Infrastructure needed for AI expansion is significant, including power grids, technology components, and other key materials. A recent initiative to ask AI companies to cover the cost of excess energy costs is the type of development that one needs to be aware of as this will impact the profitability of AI.
Remember that while AI certainly will make an impact on corporate efficiency, there will be profitability constraints that emerge for companies that deliver these solutions. That's the nature of the competitive environment.
When we conduct valuation assessments on companies, we factor in as many ancillary costs as possible to reduce profitability estimates. This is the DWM way of conducting research in a conservative manner to mitigate risk. We will continue on this path. While we are optimistic and look for opportunity, we balance that off with our view that being paranoid on your behalf Is a prudent perspective.
The following article published on CNBC outlined the President's push to pass more cost to companies building data farms requiring significant energy consumption. These headlines outline the importance of watching carefully how political actions and policies can impact corporate profitability.
If you have any questions, please let us know.
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“The major technology companies will meet President Donald Trump at the White House next week to sign a pledge that they will supply their own power for artificial intelligence data centers.
Amazon, Google, Meta, Microsoft, xAI, Oracle and OpenAI will sign the agreement at the March 4 meeting, a White House official confirmed to CNBC Wednesday.
“Under this bold initiative, these massive companies will build, bring, or buy their own power supply for new AI data centers, ensuring that Americans’ electricity bills will not increase as demand grows,” White House spokeswoman Taylor Rogers told CNBC.
Fox News first reported the development.
Trump said during his State of the Union address Tuesday that he had secured such a pledge from the tech sector, but did not provide detail on what the agreement entails.
“We’re telling the major tech companies that they have the obligation to provide for their own power needs,” the president said. “They can build their own power plants as part of their factory so that no one’s prices will go up.”
Data centers are facing opposition in communities across the U.S. as people blame rising utility bills on the facilities’ huge electricity consumption.
The Trump administration has closely embraced the AI industry as an engine of economic growth and a pillar of U.S. national security. It is an alliance that poses political risks for the White House ahead of the mid-term elections.
New Jersey Gov. Mikie Sherrill and Virginia Gov. Abigail Spanberger defeated their Republican opponents in landslide elections last November by campaigning against rising electricity prices.
The Trump administration has warned the tech companies that they risk a backlash if the public believes their data centers are driving up energy costs, Energy Secretary Chris Wright said Wednesday.
“We want to see data centers developed,” Wright told reporters on a call. “We want to see them rapidly sited. We want to see communities welcoming them, but to do that, it’s necessary to have up front investments in the additional grid infrastructure needed.”
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Source: https://www.cnbc.com/2026/02/25/trump-tech-ai-data-center-electricity-price-pledge.html
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