US Energy Department to spend $2 billion on grid upgrades to meet AI power demand

The US Energy Department is set to announce nearly $2 billion in spending on efforts to draw more electricity from the country's aging and strained power grid, as the administration of President Donald Trump seeks to avert blackouts amid surging demand driven by artificial intelligence.

The money will fund 31 projects across 26 states, expected to add more than 23 gigawatts of generating capacity — enough to power 16 million homes. The projects will deploy technologies such as sensors and other devices that monitor real-time weather conditions to ensure safe transmission or redirect power away from congested or overloaded lines, the department said.

Officials said the upgrades could improve reliability and lower electricity costs for about 100 million Americans.

"These investments will get more out of the infrastructure we already have, move more electricity across the grid, and help deliver affordable, reliable and secure power that will fuel American prosperity for decades to come," Energy Secretary Chris Wright said in a statement.

Wright was scheduled to announce the grant program on Thursday in Allentown, Pennsylvania. The program details were obtained before their public release.

The announcement comes amid warnings that AI's voracious power needs are threatening to overwhelm US electricity supplies, as large new data centers come online faster than new power plants can be built. It also comes as electricity bills rise faster than inflation in many parts of the country, blamed in some areas on demand from data centers.

Growing opposition to data centers in communities nationwide has complicated the plans of some of the world's richest companies and reshaped the midterm election landscape. Trump has continued to defend data centers even as politicians from both major parties criticize them and many communities try to block them. The Republican president said last month that US communities without data centers will "end up being backwards and poor."

Meanwhile, Congress and some states are pushing regulators to require utilities to adopt technology and new components that make grids more efficient and better able to serve new customers without additional power sources. Critics say utilities — which have seen rising profits and share prices during the data center-fueled energy boom — tend to avoid such efficiencies because they earn more from building new power plants and grid infrastructure that are more expensive and take longer to complete.

The projects announced Thursday will involve component enhancements on more than 1,500 miles (2,400 kilometers) of transmission lines and technological upgrades across nearly 21,000 miles (34,000 kilometers), the department said. Projects were prioritized based on how quickly they can be put into operation, officials said.

Funding comes from the bipartisan infrastructure law enacted under former President Joe Biden, a Democrat. The government's $1.9 billion will be matched by $3.35 billion in cost-share funding from recipients, the Energy Department said.

Trump has vowed to "unleash" the nation's energy sector in his second term, aiming to drive up record domestic oil and gas production, roll back pollution restrictions on power plants and keep expensive coal-fired plants operating past their retirement dates. His administration has pushed to help tech giants build and connect data centers to power plants and high-voltage lines, and to convert Cold War-era uranium enrichment plants into data center and power plant complexes. This summer, Trump's Environmental Protection Agency issued a plan that would make it harder for the public to learn about and comment on proposed AI data centers.