Google has agreed to cut energy usage at its AI data centres in the United States when electricity demand increases, noting a change in how tech giants respond to the growing energy stress caused by artificial intelligence infrastructure.
Faced with surging power demands and an overstretched grid, Google confirmed it has entered formal “demand-response” agreements with Indiana Michigan Power and the Tennessee Valley Authority.
Under these agreements, the company will temporarily reduce power consumption at its AI-heavy data centres during peak periods, when the grid is at risk of overloading.
These are the first such deals Google has signed specifically to control machine learning workloads, which are some of the most power-hungry processes in AI computing.
The company had tested a similar system last year in a pilot with Omaha Public Power District, where it successfully reduced energy use across three grid stress events.
The decision comes as utilities across the U.S. report being overwhelmed by the scale of electricity needed to fuel the rapid growth of AI. In some areas, demand from data centres has already exceeded supply.
The implications are serious as higher bills for everyday users, increased risk of blackouts, and mounting pressure on an already weak energy infrastructure.
We’re not talking about marginal energy use here. Data centres now account for 4.4% of the entire electricity consumption in the U.S., a figure expected to nearly triple to 12% by 2028 if current trends continue. In one extreme case, an AI facility planned in Wyoming is projected to consume more electricity than all the state’s residential homes combined.
Some AI server racks are reportedly drawing more power than entire steel plants. Training a single chatbot model can consume as much energy as 100 households use in a year. Between 2024 and 2025 alone, data centre expansion triggered an estimated $9 billion increase in electricity costs.
Unfortunately, it’s not the tech companies footing the bill—it’s the public. In Virginia, for example, Dominion Energy is seeking regulatory approval to raise household electricity bills by $10.50 per month, noting increased demand from data centres.
With regulators watching, Google’s decision appears as much strategic as it is necessary. The Federal Energy Regulatory Commission held emergency hearings in June 2025 to examine whether the country’s power infrastructure can support the wave of AI projects being rolled out. The grid is under stress.
In a blog post, Google stated, “It allows large electricity loads like data centres to be interconnected more quickly, helps reduce the need to build new transmission and power plants, and helps grid operators more effectively and efficiently manage power grids.”
Historically, demand-response programmes have been associated with energy-intensive sectors like manufacturing or crypto mining, where businesses get paid or offered bill discounts in exchange for curtailing their energy use during peak hours. Google’s move is the first time this method is being systematically applied to artificial intelligence workloads.
