The $15 Billion Lie About Who Pays for AI

Friday morning, Trump stood in front of cameras and did the most perfectly American thing imaginable: he told you he was protecting your wallet while systematically writing a check on your behalf.

The headline was clean. Muscular even. Trump makes tech giants pay for power plants. Data center owners fund new capacity. Nobody pays higher electricity bills. Problem solved, America sleeps soundly.

Except nobody in that room was planning to sleep.

Here's what actually happened: PJM—the grid operator serving 67 million people across 13 states—failed to procure enough electricity capacity for 2027. We're talking 6 gigawatts short. That's a shortage so big it needed a state governor to threaten to leave the grid entirely just to get anyone's attention. Pennsylvania Governor Josh Shapiro literally said if PJM didn't comply with the plan, the state would "go it alone." Solo. Exit the system. The actual unraveling of regional grid infrastructure.

So Trump's solution: an emergency auction. Unprecedented 15-year contracts. Tech companies bid. Tech companies pay.

Beautiful. Surgical. Absolutely meaningless.

Here's the arithmetic: The auction would support roughly $15 billion in new power plant construction. Microsoft, Google, Meta, Amazon, whatever neural network factory you want to name—they bid, they commit to 15-year contracts whether they use the electricity or not. It forces capital certainty. It forces new generation online. On the surface, it sounds like a brilliant bit of regulatory judo: make the thing consuming the power pay for the thing generating it.

Except the thing consuming the power passes its costs along to everything downstream.

Those 15-year contracts? They're not free. The contracted power gets billed back through the regulated utility rates that consumers see on their monthly statements. This isn't speculation. This is how deregulated electricity markets work. When the auction closes and Microsoft's new gas plant starts humming in Pennsylvania, the costs get embedded into the grid operator's cost structure. State regulators then allow utilities to recover those costs by raising rates on—wait for it—everyone.

The White House official told Bloomberg that "governors are committing to implement and assign these costs to the data centers." Sure. Governors commit. Then state regulatory bodies open a docket. Then utilities file rate cases. Then lawyers argue for two years about cost allocation. Then someone—a single mom in Baltimore or a retiree in Columbus—opens a utility bill and stares at numbers that got 7% bigger because her grid needs to support a server farm training ChatGPT 6.

But the genius part? You can say you stopped it. You can point at a chart and say "Look, the data centers are paying!" And technically, they are. They're writing checks to PJM. The checks just get laundered through a rate base that's supposed to be "regulated" but is actually just a political football kicked around every 18 months.

The average U.S. retail electricity price hit 18.07 cents per kilowatt-hour in September, up 7.4%. It's already moving. And it will keep moving because now you've got two concurrent pressures: the immediate need to build capacity (which costs money) and the long-term commitment to fund it (which stays in the rate base forever). Fifteen years of operating costs built into what's supposed to be a temporary emergency measure.

Meanwhile, the crypto market caught the scent of what this really was: a regime that will do anything to keep the electricity flowing. Bitcoin briefly topped $97,000 on Thursday, with retail largely defensive and institutional buyers quietly accumulating. You can't run 100 terawatt-hours of AI compute if the lights go out. The power auction essentially guarantees they won't. It's a bet on infrastructure chaos finally getting something—anything—done, even if the done part costs everyone.

Here's the visceral part that nobody wants to say out loud: the auction is necessary. Brutally, boringly necessary. PJM failed to clear capacity. The grid was going to become unreliable. You can't spin up 17 gigawatts of new demand by 2030 without building something. And if you rely on spot markets and hope that utilities will magically invest, you get what you got: a shortage.

So Trump made them pay. That's the move.

But calling it a consumer protection measure—saying Americans won't "pick up the tab"? That's the kind of language that gets used when everyone knows the tab is going to be split 47 ways and nobody's going to remember who ordered what.

The S&P 500 closed Friday at 6,940. Down 0.06%. The broader rotation that's been driving small caps for 11 straight sessions? It continued. PNC Bank beat earnings. Dollar Tree jumped 96% year-over-year on the back of better execution. The Russell 2000 has climbed 8% in 2026 while the S&P scraped together 1.5%.

These are the moves of a market that knows something real is changing. Not a temporary auction. A permanent repricing of how we allocate capital in a grid-constrained world where AI has become infrastructure, and infrastructure has become the only game worth playing.

GE Vernova stock rose 3.7% on the news. Nobody mentioned that. They just kept talking about how this helps regular Americans.

It doesn't. It helps the people with the capacity to wait 15 years for returns. It helps the states that can threaten to leave the grid and actually mean it. And it tells everyone else: your electricity costs just went into a queue behind data center buildout, and that queue isn't moving.

Sleep well.