AI's energy appetite exposes a renewables rift in Washington
With help from Aaron Mak
The astronomical energy needs of data centers for the fast-growing artificial intelligence industry have triggered a huge buildup of new power generation across the country — but the role that renewable energy will play in that mix is still very much up for grabs.
Tech companies, which have long touted their public commitments to climate goals, have leaned heavily on renewable energy as a way to ramp up their power-hungry data centers without pumping more carbon into the air. In late 2024, U.S. data centers accounted for half of total US corporate clean energy procurement, according to an analysis by S&P Global.
Now, however, the energy politics of Washington are changing — and this week's horse trading over the Senate's megabill showed that the tech industry may be shifting its stance.
At the center of the debate are the tax credits for solar, wind and energy storage that were part of the Biden-era Inflation Reduction Act. Republicans running the reconciliation process on the tax bill in the House and Senate have pledged to eviscerate the subsidies.
The tech industry has publicly pressed Congress to preserve those tax incentives — an issue that became urgent when the House tried to gut clean energy subsidies far sooner than the IRA timeline.
A group called the Data Center Coalition — whose 38 members include Amazon Web Services, Google, Meta, and Microsoft — sent a letter last month to Senate Majority Leader John Thune, asking him to extend the deadline for building new clean energy facilities with the subsidies. The letter warned that energy constraints could hinder or delay the buildout of data centers vital to U.S. leadership in AI, and that the credits were important to being sure that new power got built.
'We urge you to take a pragmatic approach to ensure we can meet the energy needs of data centers at a pivotal moment for our industry and country,' the letter reads.
The Senate did not exactly comply. In its tax proposal, the Senate Finance Committee took a more moderate approach than the House of Representatives, but still issued a plan to wind down subsidies for most renewable energy by 2028.
Senate Finance Chair Mike Crapo (R-Idaho) said in a statement that his committee's portion of the megabill 'achieves significant savings by slashing Green New Deal spending and targeting waste, fraud and abuse in spending programs.' Instead of solar and wind tax incentives, the legislation bolstered nuclear and geothermal energy.
DFD asked Amazon, Google, Microsoft and Meta — some of the biggest members of the Data Center Coalition — for a response to the Senate's latest moves. None provided an answer.
The Data Center Coalition, which initially pressed the Senate to keep the credits, also didn't comment on the Senate's bill.
One industry player willing to address it this week was Chris Lehane, chief global affairs officer for OpenAI, whose CEO Sam Altman is an aggressive investor in clean energy. Lehane did not critique the Senate or House moving to sunset off the tax credits.
Instead, he focused on permitting delays as an impediment to building new power sources. 'Ultimately … the big challenge in all of this is time,' he said, saying that slow permits were the bigger threat to getting new energy online for data centers.
That view dovetails with Republican perspectives on the industry. A senior Senate GOP aide called wind and solar 'mature industries' that no longer need federal support, especially given the high demand for electricity for AI, and said Republicans were more focused on removing permitting hurdles.
Climate change used to be a central tenet of tech companies' energy policy. Both Microsoft and Google once said they would be at net-zero or negative carbon emission by 2030, and invested heavily in wind and solar to meet their targets. AWS, Meta, Google and Microsoft did not provide a response on where their climate goals stand right now.
OpenAI just agreed to help build data centers in the United Arab Emirates — and the source of energy for those data centers remains unclear.
The apparent industry shift is frustrating to some longtime clean-energy advocates.
'Companies like Microsoft, Google, and Amazon have increasingly moved toward an 'all-of-the-above' energy strategy,' said Evan Chapman, senior director of policy at the nonprofit Clean Tomorrow. That includes nuclear, gas, geothermal and utility-owned generation — especially as AI workloads strain power systems.
The final shape of energy policy in the AI era is still under construction; the reconciliation bill needs a full Senate vote and House approval before it's passed. But one thing is clear: Big Tech's original ask for keeping renewable energy tax credits isn't likely to be heeded.
Lehane said OpenAI would be fine under the new policy and had not been planning to use IRA incentives as part of its massive Stargate data center project in the U.S. The company expects some of its early sites to be natural gas and solar powered, but will look to include nuclear and geothermal energy where possible, a spokesperson said.
Observers say the tech sector hasn't turned against renewables. But it's not fighting for them, either — suggesting that in 2025 Washington, there's more to be gained from playing ball with Republicans than from sticking their necks out for clean energy.
Local news' tech blues
As Donald Trump feuds with journalists and cuts funding to public broadcasting, several blue states are scrambling for ways to protect their local newsrooms as they lose revenue to tech companies like Google and Meta.
POLITICO's Tyler Katzenberger reports that Democratic legislators from five states – Hawaii, Illinois, New York, Oregon and Washington – are engaged in parallel efforts to get tech companies to compensate news outlets for using their content. These lawmakers fear that aggregating articles and posting them on Google search results and various social media platforms deprives local outlets of revenue.
But it's been an uphill battle. Bills in four of those states failed this year, with only Oregon's proposal still alive.
Lawmakers who pushed for the failed bills have pledged to try again.
The journalism industry has a long history of trying and failing to get help from governments to stanch the bleeding brought on by digital media. In 1980, Washington Post Publisher Katharine Graham lobbied senators to block a proposal from AT&T to develop electronic yellow pages. The company was able to launch the product only a few years later. More recently, Australia and Canada passed laws requiring the likes of Meta to pay outlets for their content, though pushback from the industry has diminished their intended effects.
Prosecutors seize millions in cryptocurrency
The Trump administration is asking a federal judge to let it keep $225.3 million in seized cryptocurrency allegedly connected to fraud.
On Wednesday, the Department of Justice filed a civil forfeiture complaint allowing the government to keep cryptocurrency confiscated during an investigation into an alleged investment fraud scheme. The department believes more than 400 people were tricked into forking over money for what they thought were legitimate cryptocurrency investments.
The department conducted the investigation in conjunction with the U.S. Secret Service and the Federal Bureau of Investigation. The cryptocurrency seizure is the largest in the history of the Secret Service, which investigates the illicit exploitation of U.S. financial systems.
Crooks on the blockchain have been stealing and scamming people out of cryptocurrency since the early years of the technology. By 2018, about 80 percent of initial coin offerings – the first round of token sales for a new cryptocurrency – were fraudulent according to estimates from the digital asset investment bank Satis Group LLC.
President Joe Biden tried to rein in these scams, and issue a 2022 executive order directing federal agencies to implement new industry regulations and consumer protections. President Donald Trump repealed that order in January. Initially a skeptic of the technology, he's now become an outspoken booster – loosening crypto restrictions and pushing a law passed on Tuesday that would make it easier to launch stablecoins, or tokens pegged to another asset.
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THE FUTURE IN 5 LINKS
Stay in touch with the whole team: Aaron Mak (amak@politico.com); Mohar Chatterjee (mchatterjee@politico.com); Steve Heuser (sheuser@politico.com); Nate Robson (nrobson@politico.com); and Daniella Cheslow (dcheslow@politico.com).
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