President Donald Trump has made energy costs his latest affordability target, and he's zeroed in on data centers run by Big Tech firms.
According to Wall Street tech bull Dan Ives, this complicates the picture for the AI buildout that's been underway for the last few years.
Trump said on Monday that the administration was working with companies to "secure their commitment to the American People." On Tuesday, Microsoft revealed plans aimed at reducing rising utility bills.
Ives said that Trump's focus on energy use among big data center players poses problems for the AI boom, and that the president's plan to have Big Tech firms "pay their own way" is a fresh headwind for the sector.
"This will create a larger bottleneck with big tech organizations looking to build out large data center footprints as quickly as possible without impacting the bottom-line, with this potentially slowing down the data center buildouts shortages/issues to fuel data center buildouts," he wrote.
Ives added that Trump's push comes at a time when the US tech sector is entering a key phase of what he calls the "AI revolution," and that he expects more companies to soon follow Microsoft's lead.
"We expect other Big Tech organizations to follow soon after given the increased scrutiny from federal, state, and local governments to address major concerns with large-scale data center buildouts," he said.
The analyst acknowledged that the rapid data center expansion has played a part in rising electricity costs, but said he believes that the AI buildout has implications beyond the domestic economy.
Ives highlighted the possibility of the US falling behind China in the global AI arms race, something that Trump has said he does not want to happen. Ives suggested that impeding the industry's progress now could compromise the broader US AI agenda.
"We believe this will be a continuous back and forth battle between Big Tech players and the Trump administration with data center buildouts an important aspect of fueling the AI Revolution over the coming years," Ives added.
