Data Center Providers, Cloud MSPs Push U.S. Treasury for Renewable Energy Policy Assurances

The Data Center Coalition -- which includes Amazon Web Services (AWS), Microsoft, Google, Meta and major cloud-focused MSPs -- is urging U.S. Treasury Secretary Scott Bessent to maintain existing tax credits and subsidies for renewable energy such as wind and solar power.

The Background: Data center operators and MSPs are concerned about a July 2025 executive order from U.S. President Donald Trump -- which calls for the U.S. Federal Government to:

• Rapidly eliminate the market distortions and costs imposed on taxpayers by so-called “green” energy subsidies;
• build upon and strengthen the repeal of, and modifications to, wind, solar, and other “green” energy tax credits in the One Big Beautiful Bill Act; and
• end taxpayer support for unaffordable and unreliable “green” energy sources and supply chains built in, and controlled by, foreign adversaries.

Where the U.S. Department of Treasury Fits In: Amid Trump's executive order, the U.S. Department of Treasury is expected to issue updated renewable energy policy guidelines as soon as August 18. Some data center providers and MSPs fear that the new guidelines will eliminate lucrative renewable energy incentives that help to power U.S. IT infrastructure, along with planned energy grid projects.

Why Data Center Providers and MSPs are Concerned: The generative AI boom has also caused energy headaches, since AI applications tend to consume more power than traditional applications. Amid growing AI adoption, data centers are expected to consume about 6.7% to 12% of U.S. electricity by 2028, up from 4.4% in 2023, according a U.S. Department of Energy report from December 2024. Meanwhile, energy demand to run AI applications is pushing up household power bills and straining the U.S. electric grid, leaving millions of Americans footing the bill, Newsweek alleges.

Data Center Energy Sources: Amid that backdrop, IT service providers worldwide are scrambling to find more energy sources to meet customer demand for power-hungry generative AI applications.

In the United States, many data center providers are mixing traditional, renewable and alternative energies to meet those power demands. Some pundits believe a Nuclear Energy Renaissance could fulfill U.S. data center power requirements.

Still, generative AI and technology leaders are hedging their bets. For instance, OpenAI CEO Sam Altman, Andreessen Horowitz General Partner Katherine Boyle, and multiple venture capital firms are funding Exowatt -- a renewable energy startup that wants to offer cost-effective power for generative AI applications and data centers.

U.S. vs. China Energy Capacity: Meanwhile, China’s power grid is roughly three times larger than the U.S. grid in nominal capacity, and China's renewable energy capacity is 4X that of the United States, according to Statistica. If the U.S. can't rapidly scale its energy grid, the U.S. could lose an AI capacity war to China, some critics allege.

What the Data Center Coalition Asserts: “Any regulatory friction that slows down deployment of new generation today directly impacts our ability to meet AI-era electricity demands tomorrow,” the coalition wrote in its letter to Bessent, according to Reuters. The letter, dated August 4, was seen by Reuters on August 15.

Next Moves: We'll be watching for next policy moves from the U.S. Department of Treasury, and the potential energy implications for data center providers, MSPs and the overall IT industry.