Trump adviser drops bombshell on Meta, Microsoft

Illinois Gov. J.B. Pritzker unveiled a two-year suspension of state tax incentives for new data center construction, according to NBC News. The pause is set to take effect July 1, as lawmakers weigh how quickly the state can add new load without tacking these costs onto households.

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The governor’s move is a key investor signal. From states’ perspective, the debate is shifting from “How do we attract data centers?” to “What conditions come with them?”

All of this includes power sourcing, grid upgrades, and community cost protections.

There’s no denying Washington’s increasing obsession with cost allocation. However, Silicon Valley is leaning in a different direction, securing power outside the traditional system.

Recent reports reveal data-center developments that use private power, sometimes even off-grid, to avoid lengthy waits to connect, transmission problems, and utility delays. It’s easy to see why: If electricity is the problem, bring your own.

Related: Veteran analyst drops a shocker on Cisco

But it also brings up new dangers and considerations that investors should consider.

• When speed is most important, what’s the fuel mix and the emissions profile?

• What happens when private electricity becomes a matter of contention for permits?

• Does off-grid electricity alleviate the burden on ratepayers, or does it simply shift the political debate?

The notion isn’t theoretical anymore; instead, it’s showing up in project finance.

For example, Zeo Energy signed a deal for about280 megawatts of generation for a data center being built in Millard County, Utah. The plan includes solar panels and battery storage, as well as gas-fired backup power for the whole site buildout.

The trendline is clear: Compute is being planned with generation, not after it.

Microsoft (MSFT) is making some of the clearest public commitments, which are aimed at the “ratepayer subsidy” narrative.

Microsoft is already leading a U.S. initiative for data centers that includes three key elements.

• Pay higher utility rates or otherwise cover costs tied to its power usage.

• Work with utilities to expand supply.

• Replenish more water than it consumes, while publishing water-use and replenishment data by region.

Microsoft’s view is that communities shouldn’t have to pay more just because hyperscalers are growing faster. This is a prudent decision, especially given the current climate in Washington.

In my opinion, the story is no longer just “AI capex.” Instead, you need to think of it as AI capex meeting energy politics, and that can massively shift winners and losers within an investment framework.

Here are three things to track.

• Formal cost-shifting frameworks: If “internalize the cost” becomes a law or a commonly used agreement, hyperscalers could have to pay more for everything in marketplaces where power is limited.

• Grid rules that make people “bring their own power”: PJM and other operators are looking into ways to push large new loads toward dedicated generation or curtailment risk, which could speed up direct deals with independent power producers.

• The “picks-and-shovels” trade widens beyond chips: Grid equipment, power developers, storage, cooling, and reliability infrastructure are some of the things that benefit from an energy-constrained AI buildout. This is especially true when data centers start coming with power plants attached.

My takeaway is that AI demands are still real. However, power is becoming the limiter. And when the limiter becomes political, the economics change quickly.

Related: Nvidia CEO shocks AI community over the one thing he didn’t do

This story was originally published by TheStreet on Feb 20, 2026, where it first appeared in the Economy section. Add TheStreet as a Preferred Source by clicking here.