Trump’s big beautiful bill risks AI leadership and power stability

US President Donald Trump’s sweeping new energy legislation, dubbed the “big beautiful bill” (BBB), may dramatically reshape America’s energy future, but not without serious trade-offs. The bill, passed by a narrow 218-214 House vote on July 3, accelerates fossil fuel development while phasing out tax credits that have driven the rapid growth of renewable energy in the US. While Trump and Republican allies hail the law as a victory for “energy dominance,” critics from the clean-energy sector, major utilities, and even moderate voices in tech and manufacturing argue that the bill could undermine the electric grid, drive up household power bills, and surrender the global race for artificial intelligence (AI) supremacy to China.

A hit to renewables just when demand surges

Under the new law, clean-energy tax credits will phase out more rapidly than previously planned. Projects must now be completed by the end of 2027 or break ground by June 2026 to qualify. The earlier Senate version had allowed a longer runway, requiring only that construction start by the end of 2027. Analysts warn the tighter deadline will result in about 20 per cent fewer clean-energy projects over the next decade.

The timing couldn’t be worse. US power demand, flat for decades, is now surging due to the explosive growth of AI and data centres. According to the International Energy Agency, electricity consumption is projected to grow 25 per cent by 2035 and 60 per cent by 2050. Tech giants like Amazon, Microsoft, and Google are investing tens of billions in hyperscale data centres that require massive energy inputs, far more than current gas generation can cover.

Rising costs, tight timelines, and a weakened grid

The bill retains some clean-energy support mechanisms, such as the transferability of tax credits—critical for smaller developers to secure capital. And a more moderate version of “foreign entity of concern” (FEOC) rules for supply chains was included after earlier drafts were criticised for being overly restrictive. Still, many say the net effect is a steep climb for new projects.

The rollback of credits for residential solar, electric vehicles, and energy efficiency further compounds the issue, potentially raising bills for millions of Americans. The Department of Energy reports electricity prices have already jumped 13 per cent since 2022 and could rise further as clean energy faces costlier implementation and more pressure shifts to ageing gas and coal plants.

Geopolitical stakes and the AI race

Beyond energy costs, the bill could have far-reaching global implications. China, America’s top tech rival, is investing heavily in energy infrastructure, installing more solar capacity than the rest of the world combined. While still reliant on coal, China now gets roughly a third of its power from renewables—compared to about 22 per cent in the US.

Energy experts warn that delaying or cutting clean-energy deployment in the US could give China a decisive edge in the power-hungry AI race. Data centres are the backbone of AI innovation, and powering them affordably and reliably is critical. While some fossil fuel advocates hailed the bill, others worry the US is missing a vital opportunity to lead.