Power Play Pitfalls

This Week's Trend In Brief:

• This week, a high-powered roster of executives from leading oil, tech, utility, and financial firms convened behind closed doors in Washington, D.C., to address the challenge of powering the AI boom.

   

• AI’s massive energy demands may dominate the conversation in D.C. and beyond, but companies racing to build the AI future risk overlooking the political, regulatory, and community pressures that could derail infrastructure, even before shovels break ground.

   

• Mounting pressure on the grid is already forcing companies into high-stakes negotiations over who gets power and on what terms, all while trying to reassure lawmakers, regulators, and communities that the benefits of AI will outweigh its burdens.

   

• Those tensions have turned AI infrastructure into a political flashpoint, with lawmakers and activists from both the left and the right challenging not only how AI is regulated but battling over its energy sources and who gets to shape its physical and economic footprint.

   

• Even as companies push to scale quickly, the risks extend far beyond energy supply. Navigating the road ahead will require more than speed – it will take political foresight, early engagement, and a playbook built to stay ahead of disruption.

Digging Deeper:

This week, a high-powered roster of executives from leading oil, tech, utility, and financial firms convened behind closed doors in Washington, D.C., to address the challenge of powering the AI boom. The gathering underscored how central the issue has become in corporate boardrooms, as hyperscalers pursued energy solutions, from natural gas and nuclear to renewables, to support their expanding data center footprints. The ENACT (“Energy and Action”) summit was organized by two UAE-based firms in partnership with the Atlantic Council, a U.S. think tank, to discuss the burgeoning AI industry and resulting power needs. According to Axios, the meeting had planned to discuss “both the immediate energy needs to 2030 but also longer-term decision-making and opportunities” by “not just talking shop, but producing practical takeaways, with a report expected to follow soon afterward.” However, as companies focus on securing power, they risk overlooking deeper structural and political challenges that could stall the industry before it fully takes off.

The question of whether the U.S. can supply enough power for the AI boom is a critical one, especially as the U.S. tech sector is already using “as much energy as a small country.” In its latest Short-Term Energy Outlook, the U.S. Energy Information Administration projects U.S. electricity demand will reach new records in 2025 and 2026, driven largely by data centers, AI, and cryptocurrency, which was the last tech frontier to face serious energy scrutiny. A new report from Schneider Electric forecasts a 16% increase in U.S. electricity demand by 2029, primarily driven by the growth of AI and cloud infrastructure. With most data centers pulling directly from the grid, the report warns, everyday ratepayers could end up footing the bill. Yet while energy supply was a central focus at this week’s summit, companies must also remain alert to the political, environmental, and community pressures that may prove just as disruptive, even if they received less attention.

Mounting pressure on the grid is already forcing companies into high-stakes negotiations over who gets power and on what terms, all while trying to reassure regulators and communities that the benefits of AI will outweigh its burdens. As we have noted before, the explosive growth of AI and its related data centers is driving unprecedented demand for land, power, and water, triggering a wave of local and regulatory pushback. Across the country, communities are increasingly scrutinizing the impacts of massive new facilities, and doubts are mounting over whether data centers generate sufficient economic value to warrant the public incentives and infrastructure commitments they demand. Companies like Amazon are exploring deals that would ensure they contribute to grid transmission and distribution costs, while others are seeking strategies to offset potential environmental impacts that have alarmed residents in nearby communities. These fights have turned AI infrastructure into a flashpoint for utilities, developers, and lawmakers alike, as bipartisan backlash from activists and elected officials frames the boom as a proxy for deeper political and economic divides.

Now, companies find themselves caught in the crossfire, as lawmakers on both the left and right, backed by progressive and populist activists, battle over who should regulate AI and what energy sources are needed to power its infrastructure. On the right, Republicans in Congress are forwarding a ban on state-level AI regulation, alarming critics while proponents like U.S. Sen. Ted Cruz argue it would fulfill President Trump’s pledge to “unleash America’s full economic potential.” On the left, Democrats are attempting to strike the provision while pushing back on AI development due to concerns about corporate power, unchecked growth, and potential environmental harm. Many advocates on the left also believe that clean energy should fuel AI infrastructure, contending that the use of traditional energy would be “a decision driven by politics and profit.” Meanwhile, many on the right are skeptical of clean energy and believe that traditional energy sources, even including coal, are needed to meet demand and maintain grid reliability. At the same time, activists on both the left and the right are pushing back against AI infrastructure and its development, arguing that it would stall economic progress while posing environmental and health threats. Those at the recent ENACT summit may have broached these topics, but companies must understand that the on-the-ground reality is shifting fast, and navigating AI’s future will require more than energy planning.

Even as energy access for AI remains a top concern, it’s far from the only one: as competition intensifies, companies may find themselves navigating difficult trade-offs, not just about how to secure power but how to manage the growing political and community backlash surrounding AI infrastructure. To rise to the challenge, the energy and tech sectors, along with the public affairs professionals who support them, must be ready for pushback from lawmakers, regulators, communities, activists, and even from competing interests within their own industries. That means identifying emerging risks early, mapping all the stakeholders involved, and building systems to align ambition with infrastructure reality before resistance has a chance to harden. The AI future is taking shape now, and without a strategic approach, companies risk being outpaced by the very transformation they are driving. Meeting this moment requires more than speed – it calls for a proven playbook built to anticipate pressure and stay ahead of disruption.

Trends in Energy is your weekly look at key trends affecting the energy industry, brought to you by the competitive intelligence experts at Delve. As the political and regulatory landscape continues to shift, reach out to learn how our insights can help you navigate these challenges.