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▶ 0:14:39this hearing of the subcommittee on economic growth, energy policy, and regulatory affairs will come to order. Um, without objection, the chair may declare a recess at any time or recognize myself for the purpose of making an opening statement. And I'm going to need my glasses for that. We're here today to discuss America's AI moonshot. Artificial intelligence or AI is likely to become one of the most consequential technology transformations of the century.
▶ 0:15:05America's seeking to redefine the possibilities of this emerging technology around the globe. AI has the potential to transform countless economic sectors. In health care, AI is already allowing providers to create cancer screening and pre-treatment plans for patients diagnosed with cancer. This could transform how our healthc care providers provide the best possible care.
▶ 0:15:32In manufacturing, AI is being used to predict machine failure, allowing proactive maintenance that saves money, time, and even lives. In defense, AI is being used to improve decision-making processes for to protect our men and women in uniform. Many more examples exist from education to finance to government services. Even industry will benefit from AI.
▶ 0:15:57Our country has the skills, the expertise, and the capital necessary to bring this vision to life. But what we needed most was a president who sees the importance of this innovation for future economic prosperity. In his first news conference following his inauguration, President Trump announced the plan of Stargate, a joint venture between OpenAI, Oracle, SoftBank, and MGX to invest in AI infrastructure to propel new developments in this field.
▶ 0:16:28This $500 billion investment will allow both the US and our strategic partners around the globe to unlock the next generation of AI. Later, President Trump signed Executive Order 14179 to sustain the and enhance America's global AI dominance in order to promote human flourishing, economic competitiveness, and national security.
▶ 0:16:51But planning for the future of machine learning is complex as there are numerous factors that must be considered by Congress and the administration to ensure that America's private sector will be led will be leading the a charge on AI. Data center power demand is reshaping how power generators and utilities plan for future demand growth and the infrastructure needed to support this demand.
▶ 0:17:16According to a report by the US Department of Energy, data centers consume roughly 4.4% of all US electricity in 2023, a percentage that is expected to to rise to between 6.7 and 12% by 2028. This rapid growth is astounding and has concerning implications for both current and future power generation.
▶ 0:17:40Additionally, companies are in search of qualified and skilled workers to fill the estimated 100,000 jobs that are needed to support this moonshot. Northern Virginia, which is just across the river, is a crossroads for an estimated 70% of the world's internet traffic.
▶ 0:17:57A report published in December by the Joint Legislative Audit and Review Commission found that the data center industry is estimated to contribute 74,000 jobs, 5.5 billion in labor income, and 9.1 billion in GDP to economic to their economy each year. President Trump has made his intentions very clear. America can and will become a global leader in the field of artificial intelligence.
▶ 0:18:27The nation that unlocks the future of generations of AI first will experience transformational economic value and unleash a new wave of human potential. I commend the Trump administration's bold ambition on this issue and I look forward to hearing from our witnesses about how we in Congress can make this vision a reality. And with that, I yield to Ranking Member Frost for his opening statement. Thank you, Mr. chairman, and thank you so much to our witnesses for being here this morning.
▶ 0:18:56Artificial intelligence is quickly becoming part of Americans everyday life, and a lot of us are growing to love the entertainment efficiency it brings. AI has exciting benefits for healthcare, education, and is reshaping our economy, national security, and social life. Continuing progress in AI will require an enormous amount of technology and infrastructure including the hardware, software, computer networks, data and facilities required to operate AUI AI algorithms.
▶ 0:19:26Data centers uh data center capacity plays a key role in the future of innovation and the future of our people. In January, the president announced Stargate, an AI infrastructure project with 500 billion in commitments over four years that would expand on progress made during the Biden administration. It's a positive thing that the president is continuing the focus on developing the capacity and uses for AI, but we believe parts of his approach are wrong.
▶ 0:19:53We can support innovation without removing the safeguards that have prioritized personal civil rights and liberties. Um but instead we've seen that we're only pushing forward with policies that benefit a lot of companies corporations. The tech companies that are promoting and investing in AI are some of the most powerful in the world. And we just want to ensure that there is not um a large power imbalance between those companies and the communities that they are looking to do business with and do business in.
▶ 0:20:20County commissioners in Oregon were confronted with an army of topshelf lawyers when working um out a data center deal with Amazon. The deal resulted in a billion dollar tax break for the company. A Microsoft data center, New Albany, Ohio, received a 15-year property tax exemption while expecting to create just 30 jobs with an average salary of $50,000 a year. We need AI policy that will help put people first.
▶ 0:20:46The Trump administration has reversed um some of the progress that we've seen made to establish reasonable safeguards on AI, such as regular testing requirements to demonstrate that it does not violate civil rights or civil liberties. Um and in an apparent attempt to clear the way for any perceived barriers to America's dominance in AI, but the health, safety, and privacy of our people are not barriers. They're our rights. And part of our job as Congress, at the same time, we've seen benefits from AI development.
▶ 0:21:15We've also started to see examples of the risks of AI from deep fakes to the use of limitations of copyright copyrighted material. In just the past few weeks, we've seen AI used to replicate Studio Gibli's uh style through the unauthorized training of AI on Miyazaki's copyrighted material. H&M announced that they're going to start using quote unquote AI twins in place of real models.
▶ 0:21:40and more than 420 actors, directors, and other creatives sent an open letter urging the government to uphold copyright laws to protect the arts, which is important to me as an artist. The GAO found that poorly uh designed AI systems used in the healthc care uh uh field can harm patients through misdiagnosis or bias leading to questions of accuracy, security, privacy, and liability.
▶ 0:22:04We should also be concerned about AI's use when it comes down to national security, including the possible use of deep fakes on the battlefield, AI control of nuclear weapons, or autonomous weapons uh authorized to make decisions about lethal force. Relevant to our work on this subcommittee is the promotion of reasonable AI safeguards to address environmental concerns. AI is powered by data centers that use an astonishing amount of electricity.
▶ 0:22:30The carbon footprint of data centers is already greater than the entire commercial airline industry and their power usage will more than double over the next 5 years. A single data cent's campus can consume a gawatt of electricity, an amount of electricity that could power Pittsburghs. This electricity demand can overwhelm a city's grid and raise utility bills.
▶ 0:22:53Data centers have massive diesel backup generators that are regularly testr run, expelling black fumes of toxic smoke over entire neighborhoods and increasing output from nearby fossil fuel power plants. In the four years between 2019 and 2023, researchers from Caltech estimate AI data centers cost people tens of billions of dollars in health care costs and resulted in more than 1,000 premature deaths.
▶ 0:23:22Each data center also consumes millions of gallons of water every day for their cooling systems because humidity can be harmful to data centers hardware and they are often uh cited in states where water is already scarce. It's a matter of national at the same time it is a matter of national security that we maintain our global AI ed edge and that that edge has already led to innovations in field like medicine, energy and transit that are improving people's lives and the lives of Americans.
▶ 0:23:50Many will put this false dichotomy up that you have to choose an eitheror approach. I reject that. But as we enthusiastically pursue AI innovation, Congress must look out for working families and pass and strengthen responsible safeguards. Thank you, and I yield back. Thank you. Without objection, Representative Fedorek of North Dakota and Representative Subraun of Virginia are waved on to the subcommittee for the purpose of questioning the witnesses at today's hearing.
▶ 0:24:20I am pleased to welcome an expert panel of witnesses who each bring experience and expertise that will be valuable to today's discussion. I'd first like to welcome Neil Chilson, the head of AI policy at the Abundance Institute. Neil previously served as acting chief technologist at the Federal Trade Commission and brings a breadth of expertise in the field of artificial policy. Thank you, Neil. Welcome.
▶ 0:24:50Next, we have Josh Levy, the president of the data center coalition, an association representing the owners and operators of the digital infrastructure used to support the modern economy, including cloud computing and artificial intelligence. Thank you. Welcome, Mr. Levy. Next, we have Mark Mills, the executive director of the National Center for Energy Analytics, a National Energy Think Tank.
▶ 0:25:17Mark has a robust background in energy policy and experience as an experimental physicist and development engineer in micropos processors and fiber optics. Welcome, Mr. Mills. And lastly, we have Tyson Sloum, who is the energy program director at Public Citizen. Tyson is also a faculty member at the University of Maryland Honors College where he teaches energy and climate policy. Welcome, Mr. Sloum.
▶ 0:25:43I thank each of you for being here today and I look forward to your testimony. Um, pursuant to committee rule 9G, the witnesses, I'm we request that you please stand and raise your right hand. Do you solemnly swear to affirm that the testimony that you're about to give is the truth, the whole truth, and nothing but the truth? So help you, God. Let the record show that the witnesses answered in an affirmative. Thank you. You may be seated.
▶ 0:26:13I appreciate you being here today, and I look forward to your testimony. Um, let me remind you that the witnesses that we have read your written testimony, and it will appear in the full in the record. Please limit your oral statements to five minutes. And as a reminder, please press the button on the microphone in front of you so that we can actually hear you.
▶ 0:26:35Um, and after after four minutes, the light will turn yellow and then after five minutes light turns red, at which time your time is up. I now recognize Mr. Chilson for his fivem minute opening Thank you, Chairman Burlesen, Ranking Member Frost, and the distinguished members of the subcommittee. I'm Neil Chilson. I am the head of AI policy at the Abundance Institute.
▶ 0:26:58Uh we're a nonprofit dedicated to fostering the cultural and policy conditions for innovative technologies such as artificial intelligence to thrive and drive widespread human prosperity. Imagine a future where AI tools routinely help doctors identify existing drugs to treat patients with rare underresarched diseases.
▶ 0:27:21where CA cancer is identified earlier with a 99% accuracy, where administrative costs in health care dropped by hundreds of billions of dollars annually and where traffic accidents declined by up to 90% saving nearly 40,000 American lives and $190 billion each year. This isn't a science fiction future. It's here. Uh research in my uh written statement details each of these situations.
▶ 0:27:49Uh these credible transformations are already beginning. They're powered by AI technologies that research shows are enhancing worker productivity by up to 43% in certain tasks, improving team performance, leveling up low-skilled workers faster, and even boosting worker morale. AI is also transforming jobs and powering the creation of new products, services, and entire industries, creating a more dynamic, competitive economy.
▶ 0:28:17It's helping small businesses and entrepreneurs scale faster and the jobs that it's creating include high-skilled jobs or high-v value jobs in the skilled uh trades. The race for AI dominance is underway and America's economic future depends on winning it and the stakes are high. Analysts project AI will drive a a 19.9 trillion dollar global economic impact through 2030.
▶ 0:28:44But realizing this potential requires Congress to build the right launchpad for our AI moonshot. Today I want to focus on two critical regulatory environments that determine America's AI future. First, the software regulatory environment. America's leadership in AI has flourished under our lightouch sector specific approach.
▶ 0:29:07This open system has allowed tremendous innovation in software while still ensuring accountability through existing laws on consumer protection, civil rights, and safety. But a patchwork of state regulations threatens this environment. Over 900 state AI bills have been introduced across the country since January. Some states, however, are offering promising models. Utah's AI act exemplifies a thoughtful approach.
▶ 0:29:35It extends traditional consumer protections AI applications while creating a regulatory sandbox that encourages innovation. Their first agreement was with a company named Eliza Chat, which is an AI mental wellness app for teenagers, demonstrating how to bring innovation to difficult challenges, but with appropriate safeguards.
▶ 0:29:59To strengthen our software regulatory environment, Congress should build on Utah's success by defending AI innovators from conflicting state regulations while creating federal regulatory sandboxes for cooperative experimentation. Second, and other panelists on here are much more expert on some of this, but I want to dig into it a little bit here. We must reform our energy regulatory environment.
▶ 0:30:23While our software rules allow rapid innovation, our energy regulations create crippling bottlenecks that threaten American AI dominance. Two out of three federal environmental impact statements take longer than the legally required two-year timeline. Stalling critical energy projects unnecessarily. And when we do manage to build new energy sources, connecting them to the grid takes far too long. The contrast with Texas is revealing.
▶ 0:30:51From 2021 to 2023, Texas added 25 gigawatts of new generation, almost double what other US grids added. This is possible because Texas uses a more flexible connect and manage approach. To boost our energy infrastructure, Congress should streamline permitting processes and constrain counterproductive litigation. And it should direct federal agencies to accelerate grid interconnection. America's AI moonshot depends on getting both regulatory environments right.
▶ 0:31:21We must safeguard open software innovation while dramatically reforming our energy regulations. By addressing these dual challenges decisively, Congress can ensure that the United States maintains and enhances its AI leadership, driving economic prosperity, improving public welfare, and securing America's competitive advantage for generations. Thank you for your attention. and I look forward to your questions. Now recognize Mr.
▶ 0:31:51Levy for his five minutes. Thank you, Subcommittee Chairman Berles, Subcommittee Ranking Member Frost, distinguished members of the subcommittee. We really do appreciate the opportunity to be here today with you to provide testimony on the topic that is critical to the future of America's economy and national security. My name is Josh Levy. president of the data center coalition or dcc which is the membership association for the US data center industry.
▶ 0:32:16Our members provide the digital infrastructure that enables cutting edge technologies that drive the 21st century economy including AI. Data centers also ensure the essential services our homes, businesses, schools, hospitals, manufacturing facilities and governments rely on and are always available. Today, everything from the way we work and learn to how we buy groceries, bank, and even access medical care occurs online.
▶ 0:32:40The average American household now has 21 connected devices, including phones, watches, thermostats, appliances, and others. And consumers and businesses are expected to generate twice as much data over the next 5 years as they did over the past 10. This growth is driven by the widespread adoption of cloud services and connected devices and the rapid scaling of advanced technologies like generative AI which alone could create up to 4.4 trillion dollars in economic value globally by 2030.
▶ 0:33:09According to McKenzie, these digital cloud-based services we all rely on actually take place in physical locations, America's data centers. To meet growing demand for these digital services, our member companies are making multi-billion dollar investments in data center infrastructure in this country. These investments support hundreds of thousands of quality jobs across the nation and contribute billions of dollars in local, state, and federal tax revenue.
▶ 0:33:33Data centers are now under development in at least 23 states nationwide from mature markets like Virginia, Georgia, California, Texas, and Arizona to emerging markets like Indiana, Missouri, Louisiana. In fact, the US is expected to be the fastest growing market for data centers globally with capacity more than tripling between 2024 and 2030. Beyond their critical role in the modern digital landscape, data centers are vital economic engines nationally and in local communities across the country.
▶ 0:34:02Between 2017 and 2023, the data center industry's total contributions to US GDP was $3.5 trillion according to PWC. In 2023, the data center industry directly employed more than 600,000 workers in the United States and in total supported 4.7 million jobs.
▶ 0:34:20The sector contributed $163 billion in federal, state, and local taxes in 2023, which provides consistent funding for important community priorities like public safety, transportation, education, and reports indicate the industry is planning investments in the US of many hundreds of billions of dollars based on 2025 announcements alone. The exponential growth of the data center industry has been a catalyst for broader economic development supporting ecosystems of suppliers, manufacturers, service providers.
▶ 0:34:51At the national level level, each direct job in the data center industry supports more than six jobs elsewhere in the US economy. From construction companies and fabricators of steel to HVAC and equipment manufacturing, the data center industry is fueling economic growth in countless companies across a variety of industries. However, the continued growth of this critical industry faces challenges. The first is ensuring timely access to reliable energy, which has become the pacing issue for this industry.
▶ 0:35:20We believe Congress should look at ways to speed up the permitting process for electric transmission and generation to ensure the nation has sufficient energy capacity to power America's growing economy. Additionally, major sectors of the US economy are experiencing shortages and delays with the delivery of capital equipment, especially electrical equipment. The data center industry is leaning in, working with manufacturers to shore up supply chains and shorten construction timelines.
▶ 0:35:44However, we do support congressional and administrative actions to expand domestic capacity of critical electric and data center equipment. This will help ensure timely availability of these materials to allow the data center industry to meet growing demand. Finally, the industry is facing workforce shortages as data centers expand from mature markets to emerging markets across the country. The rapid pace of development and the need to meet specialized skill requirements have contributed to labor shortage both in operations of data centers but also in constructing data centers.
▶ 0:36:15We support the creation of national technology hubs, expanding and strengthening data center education programs, including community college programs and training veterans for jobs in the data center industry. Data centers are vital to enabling critical and emerging technologies like AI that are essential to US national security, our global competitiveness and economic prosperity. By proactively removing barriers to deployment, the federal government can play a pivotal role in supporting this critical sector, fostering economic growth and maintaining our competitive edge against foreign adversaries.
▶ 0:36:46We thank the subcommittee for its leadership in promoting a strong data center and AI ecosystem here in the US and look forward to continued collaboration and dialogue. Thank you. I now recognize Mr. Mills for his opening statement. Thank you, Mr. Chairman, and ranking member Frost and members of the committee for the opportunity to testify. Of course, the words revolution and pivot in history are frequently overused and misused.
▶ 0:37:13But by now, as we see from opening remarks from you, Mr. chairman and ranking member uh Frost, it's very clear these words are appropriate and describing the emergence of AI as a practical tool deployed in the infrastructure of the cloud. Certainly debates about risks and benefits over what's hype and what's real that'll continue, but the fact of an unfolding revolution is evident across nearly every domain.
▶ 0:37:38Evoking the moonshot is appropriate in terms of echoing the great power competition of the 20th century and because of AI's strategic implications, but the central promise of usable AI at scale of course is an economic one and specifically in how AI will boost US productivity overall. And while we're currently preoccupied with the politics of cutting government waste and the deficit, the holy grail remains in finding a productivity boom.
▶ 0:38:03consider is if the current Congressional Budget Office forecast for anemic annual productivity growth, if AI raises that growth merely back to the long run 20th century average, that would by 2030 add a cumulative extra 10 trillion dollars to the US economy. And it could be more.
▶ 0:38:21It's that promise that underlies the private sector's drive to spend hundreds of billions of dollars, likely a collective trillion dollars in total by 2030 to build out more data centers at the epicenter of the cloud where AI is democratized. The next one year's spending on data centers will exceed alone the entire decade of government spending on the moonshot. This unprecedented digital construction that's underway has led to the rediscovery of a basic truth.
▶ 0:38:48All software exists inside hardware that in turn uses energy and a lot of it. Each digital bite uses an infinite decimal amount of energy. But this is where we find salience for the euphemism that quantity has a quality all of its own. Again, in moonshot terms, the amount of energy used to launch a rocket is consumed every day by just one AI infused data center.
▶ 0:39:13or in monetary terms 10 billion worth of data centers will consume some 10 to 20 billion of electricity over a decade of operation and for context that $10 billion worth of EVs will consume onetenth as much electricity such realities invariably invoke a response that we should focus on even mandate more energy efficiency now this is a rabbit hole subject but suffice to say that efficiency is precisely why data center demands have risen consider If
▶ 0:39:43a smartphone today operated at the 1984 computer efficiency, that one phone would use more electricity than this entire Rayburn House building. Instead, efficiency gains have led to billions of phones and thousands of data centers. This is, of course, the off-noted uh so-called Jevans paradox, which I note for the record, Jevans knew in the 19th century wasn't a paradox, but a reality.
▶ 0:40:08Credible forecasts see within a half decade or so new data centers needing somewhere between 70 gawatts and 130 gawatts more power capacity built than planners originally thought only a couple years ago. This is the equivalent of adding the generating capacity equal to the entire state of California in a half dozen years.
▶ 0:40:27Thus, the key question is will there be enough power to fuel the velocity of the cloud's expansion to stay at the forefront of this Reality and arithmetic show that the needed power won't come from squeezing more out of existing assets or even stopping coal plant retirements or utility scale wind and solar nor from building new nuclear plants. All that will help but it won't be enough and soon enough. Most of the new power will come from natural gas combustion turbines and engines.
▶ 0:40:57Those can be and in fact they are being built rapidly. That implies the need of course for a lot more natural gas. Uh, one might be tempted here to invoke the politically charged drill baby drill, but politics aside, history does show that the wells and the pipelines can be deployed fast enough at the scales needed. This is where the moonshot metaphor fails. The Apollo program had the government spending taxpayers money to put a dozen men on the moon.
▶ 0:41:26But ensuring we achieve liftoff for AI productivity will come from private capital rapidly deployed to build the needed power systems for those digital infrastructures. The government's role here, you won't be surprised to hear me say to ensure that US industries can win this great powers race should start with asking the private sector players to identify the regulatory and policy centric impediments to rapid deployment at the scales needed and then of course removing or
▶ 0:41:56resolving the impedimenting the impediments not eliminating rules and regulations but accelerating rationalizing. This will be a great motivation to restore that long-standing effort and this could in fact be the real moonshot challenge in all this. Thank you. Thank you. I now recognize Mr. Sloum for his opening statement. Thank you, Mr. Chairman, Mr. Ranking member, members of the committee. I'm Tyson Slokum. I direct the energy program with Public Citizen here in Washington DC.
▶ 0:42:24America today has more data center capacity than any other nation. While some are issuing panicked projections about massive new infrastructure needs to power future data centers, I urge the committee to exercise restraint.
▶ 0:42:38While America's power needs are indeed growing, driven by building and transportation, electrification, and data center development, allowing hype and hysteria to drive long-term capital inensive infrastructure investments will lead to stranded assets that may threaten taxpayers uh and rateayers with unnecessary costs. Forecasters consistently overestimate electricity demand in part because they emphasize static load growth over efficiency gains.
▶ 0:43:07We all remember in the early 2000s in the wake of the telecommunications act of 1996 and other initiatives, analysts projected surging electricity demand with the internet and everyone having computers, it never materialized. Instead, for the next two decades, America experienced flat uh uh energy demand. Although data center energy use is increasing, energy per energy use per computation has decreased by 20% every year since 2010.
▶ 0:43:38There are ample opportunities to require or encourage data centers developing Gen AI to pursue demand management programs to limit the need for expensive new energy uh generation infrastructure.
▶ 0:43:51I'm concerned that President Trump's impending use of emergency powers to usurp state and local laws, forcing taxpayers and rateayers to cover the costs of hastily implemented energy infrastructure, use of federal power act section 202C authority to force rateayers to subsidize inefficient power plants, or taxpayers footing the bill for defense production act giveaways to do the same is unwarranted and requires uh congressional oversight.
▶ 0:44:20Federal energy regulators also appear to currently lack adequate authorities to ensure data center loads don't disrupt power markets. In my recent challenge to data center giant Blackstone's efforts to buy a billion dollar gas plant uh right near Dulles airport uh here in Virginia, I noted that Blackstone failed to disclose to FK that it also controls most of the data center load in that region.
▶ 0:44:45Blackstone's lawyers then argued to FK that FK has no current authority to assess an applicant's control over data centers. And then last summer, FK was caught offguard when 30% of Virginia's data center suddenly went offline with a resulting surge in electricity uh nearly causing a blackout. It's clear that regulators need additional authorities and and this is where uh congressional oversight could help.
▶ 0:45:12I'm concerned that President Trump's prioritization of exporting American natural gas to Berlin and Beijing disadvantages domestic needs for the fuel. We America is already the world's largest LG exporter, but Trump seeks to seeks to authorize additional exports that will result in America exporting up to 40% of our domestically produced gas.
▶ 0:45:34LG exports are already exposing American families to higher energy burdens as gas prices at Henry Hub have doubled since November 2024. The Department of Energy warned of a triple cost increase to consumers from increasing LG exports, including a 30% increase in domestic gas prices. We've heard from some of the witnesses that natural gas needs to play a role to power data centers.
▶ 0:45:58we can't be uh increasing LG exports at the same time that we need additional uh domestic natural uh gas. In addition, President Trump's chaotic use of tariffs is not only inviting an economic recession, his haphazard trade policies are hindering access to supply chains needed to build out AI uh infrastructure.
▶ 0:46:20The uh uh Federal Reserve Bank of Dallas did a very important quarterly survey on March 26 where uh most of the 200 oil and gas executives surveyed expressed deep concern about the negative impacts to supply chains from from the president's uh uh expanded use of tariffs. We need smarter trade policy that targets tariffs coupled with domestic investment.
▶ 0:46:47We've already heard from members of the panel that there are some bottlenecks in supply chains. The tariffs are complicating uh those uh uh supply chain bottlenecks. I appreciate your time and look forward to your questions. Thank you. Thank you, Mr. Sloum. I now recognize myself for 5 minutes. Mr. Chilson, America has what some have described as a golden opportunity to lead in the next generation of AI, but many barriers still exist as has been mentioned.
▶ 0:47:18Um um what is um really holding America us back from reaching our full potential such as securing investment in private So there there are many um challenges for this moonshot and uh you know I want to endorse um uh Mr. Mills uh uh idea that it's private industry that's going to drive this ahead.
▶ 0:47:45Uh and it's Congress's job to build the right launch pad for this moonshot. Um and so clearing the launchpad is the first thing. Uh, and I think especially in the energy space, uh, permitting processes that slow down the ability to deploy and build new energy, um, not not in a way that actually achieves, uh, in many cases the economic or the, uh, environmental benefits that we're seeking, but in a way that just drags things out unnecessarily slow and gives veto points to to people who are not who
▶ 0:48:16don't necessarily have environmental concerns in hand. But uh the other big challenge I think in this space is a transformation that we're seeing largely at the state level about how we consider uh software and how we regulate software. And so um software traditionally has been regulated not directly but indirectly in the uses in which it's put. So for example we have regulation on medical devices which often incorporate incorporate software. We have regulation on transportation.
▶ 0:48:46uh cars are rolling computers at this point. And so when we regulate at the uh at the um uh use rather than at the general computation level or the general software development level, uh we get closer to the harm. We get closer to the goals of regulation and we avoid really unintended consequences. And so states are are rolling out these big picture regulatory schemes for software. I think that's a real challenge and I think it's something that Congress needs to step in on.
▶ 0:49:16Thank you. My other question has to do with the fact that there's been a lot of fear um a lot of concern or worry about what the potential outcomes might be. But to me, I see um the potential for for how how our economy is going to pivot and grow and the and the tremendous opportunities that that we will receive.
▶ 0:49:38Um, why do you think Americans should be more excited about the prospects and the job opportunities that AI might bring than be fearful? Well, I I think the uh you know, why is artificial intelligence important? It's because intelligence is important and the ability to to deploy um new powerful computation to the some of the most challenging problems that we have as humans. Uh the health care space is an amazing example of this.
▶ 0:50:07I just saw this morning there is a new paper in nature that uh is giving a woman who has not been able to speak for years. She's fully paralyzed. Uh it can it can scan her brain and she can speak by thinking the words in her head and she can speak at 90 words per minute which is you know slightly slower than I'm speaking but not that much right and that's really impressive. That is the type of medical benefit that's direct. Outside of that, the economic benefits from efficiency, uh my written testimony goes into them much more.
▶ 0:50:37Uh trillions of dollars of potential benefit in this space. Thank you, Mr. Levy. Um what are how do we begin to implement um actually let me ask this question. Um you you described that uh we have different um that once we unlock um this technology that we have some real life examples of services that are stopping us from doing so.
▶ 0:51:07um how do data centers support or how how what kind of real world examples of regula regulations and and things that are hindering you from your data centers from moving forward. Thank you, Mr. Chair. I appreciate the question and I would tell you that we are seeing a lot of barriers that are holding us back to from from moving forward as quickly as we can to meet these demand signals.
▶ 0:51:33Uh clearly energy permitting is one and the asynchronous timelines around which data centers can be constructed and uh potentially operated but then be energized is is very much a challenge. We could put a data center facility from uh you know groundbreaking to commissioning 18 months to two years in order to get energy projects online. We're looking at five years of permitting on average up to seven years for permitting alone for transmission infrastructure.
▶ 0:52:01We're also seeing some challenges, regulatory barriers when it comes to uh equipment uh particularly electrical equipment. Thank you. Uh my time is expired and with that I recognize Mr. Frost for his 5 minutes of questions. Thank you, Mr. Chairman. Um artificial intelligence requires massive data centers. Uh Meta's planned Louisiana data center will cover over 4 million square feet.
▶ 0:52:23When you realize how large these centers are, it's a little less surprising that a single center can consume as much electricity as a entire city's population. Mr. Slokum, can you uh talk to us about why data centers consume so much energy? Yeah, data centers consume so much energy because they are filled with sometimes millions of microprocessors that are doing uh computations and that takes enormous amounts of energy.
▶ 0:52:50uh increasingly those microprocessors are computing those uh uh more efficiently but as you add more and more capacity you are increasing uh energy demand and so there are um uh I believe uh requirements uh that data centers should have to improve the efficiency of of these facilities and a lot of that can be through things like demand response very often very large
▶ 0:53:21uh data center operators whether it's Meta or Blackstone or Google or Microsoft they have data centers in multiple locations and you can uh coordinate operations of these facilities and reduce consumption in one increase consumption in another based upon peak loads of available generation depending upon the hour of the day. There are all sorts of smart ways to use large energy loads.
▶ 0:53:50Uh the the concept of demand response has been around for more than a generation. Uh we're not seeing it as widely adopted in the data center field as it should be. And so before we start committing to building a lot of new uh power generation assets and associated infrastructure, we should instead be asking one of the uh most profitable industries on Earth, are you doing all you can to manage that energy load responsibly in in concert with local communities
▶ 0:54:20that are that are asked to host these facilities? And and just briefly, what are the impacts on working families in these communities? They can be significant. First, as you mentioned in your opening statement, sometimes uh these facilities are not uh significant job creators.
▶ 0:54:36They are uh often negotiate deals with uh disadvantaged local uh governments that are out lawyered and outgunned uh to give away lots of tax breaks that compromise uh local uh districts ability to fund uh basic government operations like infrastructure and schools and so forth. But you also have discrete environmental issues.
▶ 0:55:01As you noted in your opening statement, these facilities come with massive arrays of on-site diesel generators. And so those generators kick on sometimes during regular testing, sometimes because of issues with the um uh the regional power market. Those diesel generators are not clean burning facilities. Uh, it's like parking rows of 18-wheeler trucks in front of your house and turning them on all at once. There's also noise pollution associated with these facilities.
▶ 0:55:31They're not always the best neighbor. Yeah. Yeah. Um, thank you. I appreciate it. You know, but at the same time, obviously, you know, it is it is here, right? And and I think part of our job in Congress is to ask all the questions, right? We want to know how we can spur innovation. We also want to know how we can protect working families. And I think in terms of technology, this institution traditionally has not been the best at asking all the questions and then legislating having all the answers in mind.
▶ 0:56:01Look no further than social media and where we currently are where we drag our feet on uh passing good common sense legislation and then we freak out when it completely gets out of hand and and try to pass lazy legislation like we have tried to do over the past few years on this.
▶ 0:56:19And so I think it's really important um and I know the uh the chair brought up this pivot which I think AI is going to be very helpful in a lot of different places even in terms of figuring out how we're going to deal with the climate crisis right I think there's a lot here however when we use that when we talk about the pivot there's a lot of people worried about it including people like my aunt who spent a long time as a customer service representative right when we talk about manufacturing line workers when we talk about the American worker Our job
▶ 0:56:49is not to ask the questions of just one set of people, but of all people, especially the working American. And um I'd love to see us think a little bit more about this holistically as well. Just really quick, I have like no time left, but I'm just curious, there are ways, and you talked about it, that we can work at curtailing a lot of these environmental u impacts. Do you have any other ones top of mind?
▶ 0:57:10Yeah, I I think uh trying to make sure that you have zero emission, clean energy resources, wind, solar, coupled with on-site battery storage would be a very sustainable way that isn't going to be disrupting the local community, not adding to climate destruction uh and and providing reliable, affordable energy for these uh centers. Yeah. And I think this is a place where we could talk more about and we've had meetings on this too, talking about permitting reform, especially as it relates to moving forward with clean energy. So, thank you.
▶ 0:57:40I yield back. Thank you. I now recognize the gentleman from Alabama, Mr. Palmer, for five minutes. Thank you, Mr. Chairman. I thank the witnesses for being here. Um, Mr. Mills, good to see you this morning. U, what are your estimates for power generation demands over the next decade? Any any idea what those demands will be?
▶ 0:58:06the total generation demand increases from uh from growth, right? Is that Well, there's there there probably Well, let me restate it. Yes, sir. We're in an arms race with China for artificial intelligence and quantum computing. What uh what amount of power generation in addition to what we have now will we need? Well, the the FK is reporting increase between 60 and 130 gigawatts more demand by 2030 than they thought was going to happen. That's in five years.
▶ 0:58:36And yeah, that they thought two years ago. And that's not just from data centers. It's also from bringing manufacturing back and electrification of other other uh parts of the industry. What do you consider a greater threat to our future national security, losing the AI arms race to to China or climate change?
▶ 0:58:57Well, I I as you probably know, I'm on the record of putting the economy and strategic concerns uh as number one because not only from my perspective, but as we see from public opinion polls uh that most people would put the economy and national security first. If we lose the arms race to and artificial intelligence, quantum computing, yeah, to China, they will be the superpower, not a superpower.
▶ 0:59:23Um, one of the things that I I think we need to be taking a look at in addition to to the power generation is our dependence on China for critical minerals and rare earth elements. I pointed out multiple times in these hearings that there's not a single major refinery for rare earth elements in the Western Hemisphere. There's only nine in the world. are in China and the other ones in Malaysia. U I think that's got to be a top priority. We I mean we're talking about uh AI here.
▶ 0:59:53We're not going to do anything in that that spectre if China cuts us off from from rare earth elements and critical minerals. But we've also got to to meet these these demands for increased power. And one of the things that I suggested this morning in another u u meeting is there's over a hundred coal fired power plants and natural gas plants that have been shut in the United States.
▶ 1:00:16If if we started today trying to build new power generation facilities, we don't have the manufacturing capacity to produce the turbines that we need to to generate uh to meet that new demand. But we've got existing turbines in many of these facilities and transmission lines already in place. So, I'd like your thoughts on us uh utilizing small modular reactors at these facilities.
▶ 1:00:39Uh they're not as sight sensitive as as other uh for instance, you could get 600 megawatts from two small modular reactors. Uh at an existing facility where it would take 77,000 acres to get it from from a turbine farm and and that turbine farm basically turbines would have to be replaced in 25 to 30 years. You'd get 40 to 60 years generation from an SMR. What do you think about that?
▶ 1:01:03Well, Congressman, I'm I'm delighted that the tech community in the United States and Congress are enthusiastic about nuclear power again, but the reality is that you can't buy a small module reactor. They don't exist yet. We have to build them at scale and that will take years. Similarly, it actually that GE Hitachi model we think can be built in two to three years. Oh, you can construct that scale of reactor. This is the 300 megawatt class reactor.
▶ 1:01:29It's a little bit of a a euphemism to think of 300 megawatts as you know quote small. Um these are these are very big power plants. We we can certainly build them quickly. They are possible. The regulatory barriers here are still significant but you're talking uh a decade before we have the infrastructure to build them. Similarly we can build the infrastructure to make uh the critical minerals and rare earth metal refineries here but that will also take a decade.
▶ 1:01:54And meanwhile, as you know, 90% of the refined critical minerals to build windmills and solar uh panels are in China on coal fired grids. So, it's a it's a it's a a a problematic trade to to buy technology made in China. My point is is that I I I think having worked for two international engineering companies and having a little bit of understanding about what it takes and and I've told people this, you can open a mine here, but it'll be three to five years before you start getting aggregate out.
▶ 1:02:23things take three years minimum to build a processor refining facility. Notwithstanding how long it takes to get the permitting. If you permit it on day one, it still take that long, right? But if we can build small modular reactors at scale, you're going to have u uh some lower cost because you're you can basically build standardized designs. You can you can build advanced reactors that can can use u spent fuel. Mhm.
▶ 1:02:48Uh we could fuel a fleet of nuclear reactors for over 100 years if you though use them at these shuttered hydrocarbon plants, natural gas and coal. Uh wouldn't it be interesting that China's building coal fired plants to power their AI expansion that we could then use nuclear on shuttered hydrocarbon plants with no emissions to to power ours.
▶ 1:03:11And I think I honestly believe that this is something that ought to be a top priority for this administration, a top priority for this Congress to get these SMRs in place and get them in these places where we already have the turbines and already have the transmission lines. Count me count me count my vote uh enthusiastically on that strategy. Congressman, thank you, Mr. Mills. I thank uh the chairman. I yield back. Thank you. I now recognize Mr. Subraman from Virginia for five minutes of questions.
▶ 1:03:41Uh thank you, Mr. Chair. Uh I appreciate some of the discussion today and I think I understand it that uh you know data storage uh is more important than ever as we have AI and blockchain becoming more prevalent uh and accessible. Um but I want to uh tell you a cautionary tale about my community. Um my district is home to more data centers than any other district in the country. In fact, if my district were a country, it'd have more data centers than almost every other country in the world.
▶ 1:04:09And uh if you look at this 10 data centers usually use more power than all of DC and we have more than 200 and um with another hundred planned and you know many years ago when these data centers were approved they seem like a great idea at the time. You talk about lower property taxes and you know revenue for the counties. Uh but our community is paying the price now and uh you know we're a cautionary tale for the rest of the country. Uh the power needed for these data centers is creating a huge problem for a community.
▶ 1:04:39We have power lines right now in Ashurn and Leburg and all over Lowden County uh Leburg, Loveitzville, Fakia, Rapahhanic counties are facing similar proposals of building transmission lines or data centers that are you know quite frankly invasive and not great for the communities. And um we are paying the price now for many of these data centers. In the next 5 years alone, data centers could increase customers bills by up to $276 a year.
▶ 1:05:06And people's utility bills may double in the next 7 to 10 years just to power data centers. And the environmental impact is real as well. These green spaces are disappearing. Pollution is rising and water supplies are being stretched thin. It's making reaching our clean energy goals in Virginia nearly impossible. We set those in place. And even historic places like Manasses battlefield are under threat as well. And it's also security risk. Uh putting all the nation's data centers in one place is a huge problem. Uh you just look at the Ukraine war, right?
▶ 1:05:35When Russia failed to hack Ukraine's telecom networks, what did they target? They targeted the data centers. And so Northern Virginia is becoming more of a target than Washington DC itself. And and that's why we have a lot of comm people in our community standing up and fighting back. The digital gateway in Prince William County for instance was blocked from moving forward by passionate citizens standing up for the health of their communities and equally passionate citizens are fighting proposals in Faulier counties, Raphanic counties and other parts of Lowden.
▶ 1:06:02And uh you know there's one local high school student that started a petition about a power line going through Ashurn and she said our county is meant to be a place where families can thrive, where kids can be happy and healthy and where communities can grow, not an industrial zone filled with data centers and high voltage power lines. So, uh, what I'm asking today is let's be smart about how we're deploying data storage as AI and blockchain, uh, becomes the norm.
▶ 1:06:26And I'm calling for a national strategic plan on how we deploy more data storage that takes into account the impact on communities. Needs to be thoughtful. We need to be thoughtful about how we handle the unintended consequences on communities. Like how will it affect costs and people's utility bills? How will it impact our environment? And how do we ensure that the security of these data centers is is sufficient? We need to be thoughtful about data centers and data storage and their long-term impacts.
▶ 1:06:52And one can support an innov in innovation, but it doesn't have to come at the cost of our community. So I yield back. Thank you, Mr. Chair. Would you yield to me, Mr. Submer? Yes. I'm I'm just curious, Mr. Slokum, on what what um he was just talking about in terms of the rising costs for families at home. is have you know what are there any solutions that folks have been talking about in terms of this? Absolutely.
▶ 1:07:18And in my written testimony, I cite to some excellent research uh by the Harvard Law uh electricity policy institute, which documents all of these problematic deals between electric utilities and the data centers where the utilities and the data centers sort of have a shared objective here uh in terms of uh the the utilities want to build more rate base that they can charge to consumers and the data centers want to get access to the utilities infrastructure that's paid for by rateayers and not the shareholders.
▶ 1:07:48of uh the big tech companies. And so when you're asking working families to pay higher electric rates so that more infrastructure can be built to serve billionaire controlled tech companies. That's a problem and that's an equity issue. Uh I am in my written testimony. I acknowledge that AI plays a central role in our economy for a number of different important uh uh deployments.
▶ 1:08:17But the reality is is that the infrastructure has to be done in concert with rateayers and with uh local residents. And right now we're seeing big tech companies with their expensive lawyers strongarmming communities. And it's not just in liberal democratic areas. It's in red states. It's in conservative areas. And so what we need to see is a balance. And and I'm always concerned when in Washington DC everyone says we need permitting reform. Right?
▶ 1:08:44What permitting reform means is trampling over the rights, the constitutional rights of our communities. We have to have a balance that respects the constitution and respects communities ability to live the way that they want to and and not have big tech data centers uh dominate the Thank you.
▶ 1:09:12Now recognize the the gentle lady from Arizona, Miss Ensari, for five minutes. Thank you so much, uh, Mr. Chair, and thank you to our witnesses for being here today. Um, my district in Arizona and the surrounding Phoenix metro area is one of the fastest growing data center hubs in the country. By 2028, it is expected to be the nation's second largest concentration of data centers, behind only Northern Virginia um, in Mr. Subramanyam's district.
▶ 1:09:38For our national security and economic prosperity, we absolutely need to be global leaders on the artificial intelligence front. To do that, we will need to keep building more data centers and the infrastructure to support them. But we also need to do that in a way that's smart, ensuring lasting resiliency in these systems and our energy and water future. Arizona Public Service, which is the largest power provider in my state, has projected that data centers will account for 55% of its power needs by 2031. So my first question, Mr.
▶ 1:10:08Levy, what are companies doing to lower their power usage going forward? Thank you, Representative. I very much appreciate the question and we are certainly seeing a great deal of growth in Arizona and it has been a great destination for data center employment. Uh this is an industry that continues to innovate both on energy and water utilization.
▶ 1:10:32Um I think one of the main things to recognize is that data centers centralize what would otherwise be disparit computing resources. Bring them together under uh a facility. Uh in doing so you see already according to Lawrence Berkeley National Lab about a 600% gain in energy efficiency over uh a disagregated compute. Uh and that was based on research they did between 2010 and 2018. Um that continues.
▶ 1:11:00is you're seeing a tremendous lean in on energy efficiency for a variety of reasons, but one of which is energy is a cost driver and and our members uh you know can pay anywhere from 40 to 60% for energy. Every electron is is is precious and and is managed such uh at the same time. One of the primary functions of a data center is to remove heat from servers that generate heat uh and ensure that those servers can continue to uh perform.
▶ 1:11:26When I went into my first data center facility in 2001, I had to wear a windbreaker because it was a cool environment and and and you know, notably so. Going into a data center now, you'll find, you know, some ambient temperatures in the 80s, maybe even higher because the the hardware uh has been able to withstand based on innovations and design, you know, increasingly high temperatures.
▶ 1:11:51I do want to just indicate there is a fundamental trade-off right now in cooling technology between energy efficiency and water efficiency and the data center industry does take uh a lot of thought as they are deploying infrastructure in locations to make sure uh that they're aware of the water availability the energy availability the trade-offs in terms of how they're going to cool those servers. Thank you so much. Actually in our last subcommittee hearing um here we discussed how to strengthen America's energy reliability.
▶ 1:12:19I do strongly believe that the greatest energy source is the energy that we don't use and the best way to ensure energy reliability is to innovate. So that's good to hear that you feel it's moving in that direction. Mr. uh Slokum, question for you. Would you agree that the AI industry and data centers would be more cost effective if they use less electricity and therefore spent less on their power bills? Of course. The question is, do they have the necessary incentives when they're cutting sweetheart deals with a local utility?
▶ 1:12:49Their focus is not on uh uh efficiency. It's on obtaining access to uh that transmission or generation infrastructure. And so I think it would be helpful to have uh guide rules uh from Congress about energy efficiency and demand response initiatives for the data center industry uh to ensure that we prioritize more efficient operations going forward.
▶ 1:13:18So in Arizona and much of the west as as I know that you know the most critical resource that we have is water and a recent study showed that a single data center can consume up to 5 million gallons of drinking water per day. That means they're not only straining and already limited resources in our state. But the result also means that water rates are going up for families. What can this question is also for you. What can the AI and data center industries do to use less water while also reducing their strain on the power grid? Right. Well, as we just heard Mr.
▶ 1:13:48Levy say that one of the big considerations for data center location is the availability of water. Uh so I I think and and out west water resources are incredibly scarce and becoming more scarce and it's a huge challenge.
▶ 1:14:02So what we need to do is to ensure that uh that they are recycling or reusing water resources that they are uh treating those water resources that we're not dipping into aquifers or other drinking water resources uh just to keep large computer networks from overheating. Thank you.
▶ 1:14:24And I just want to I'll wrap by saying, you know, I'm not anti-AI or anti-data center, but if we really do want to dominate this industry as a country, we need it to be futureproofed. We need to be innovating. And the goals uh to make less energy and water intensive if we really want it to be sustainable, and I don't just mean sustainable in the climate sense, but sustainable is profitable and a continuously advancing industry. So, thank you so much. I did want to um ask for unanimous consent to enter the following articles into the records if that's okay, Mr. Chair. Um, what are the names of the articles?
▶ 1:14:55Uh, first, a 2024 article from Business Insider titled, "Google's water use is soaring. AI is only going to make it worse." 2023 article without objection. Go ahead. Thank you. 2023 article from the Washington Post titled, "A new front in the water wars, your internet use." Without objection. And the third piece and a 2024 piece from the University of Tulsa titled data centers draining resources in water stressed communities. Without objection. Thank you. I now recognize the gentleman from Pennsylvania, Mr. Perry, for five minutes.
▶ 1:15:25Thank you, Mr. Chairman. Mr. Chilson, in your testimony, you mentioned Microsoft's recent announcements to announcement to reopen ThreeMile Island uh to power one of its data centers in Pennsylvania. It's at the heart of the district that I'm honored to represent.
▶ 1:15:43uh Constellation Energy by reopening it will create approximately 3,400 new jobs uh create over $3 billion in state and federal taxes adding $16 billion to Pennsylvania's GDP.
▶ 1:15:58Can you I mean con well constellation obviously owns Three Mile Island but Microsoft could have said well we want the most efficient I know we were just talking about efficiency for data centers and that that data center operators don't want or maybe don't care. That's the inference. They don't care about the efficiency of the power they get. So why didn't Microsoft come to Pennsylvania to the PJM and say, "Well, look, we need this much power.
▶ 1:16:25we want you to build this much solar or we want you to add this much wind or this much renewable. Why did they pick three Mile Island? I think they're looking at the the trade-offs and the cost to energy there and uh you know uh getting more energy um from a facility that uh you know has a proven uh ability to generate it. Um and I think the ability to to mobilize it quickly.
▶ 1:16:50Um this is a race uh not just in uh a highly competitive race among companies uh in the US but uh obviously internationally and so getting this uh done quickly I think is really important and I think they saw the opportunity to um to jump on this particular uh supply. Do you know the efficiency rating of nuclear power, particularly Three-Mile Island? Is it 95% efficient, 97 when it was operating previously? Do you I I don't know offh hand.
▶ 1:17:20I I suspect there are some other people on this panel who uh who might be able to It's in the high 90s, right? And it's base load power, right? And it's not dependent on the sun shining or the wind blowing. Do data centers do or do do data centers should they be concerned about uh base load power that is reliable and consistent 24 hours a day, 365 days a year? Absolutely. They run some of the most important uh services.
▶ 1:17:48They support some of the most important services that we all use all the time. And so they need to be up and running all the time. Mr. Mills, you seem interested in answering and and you can go where you want to with this. We've got a little bit of time left, but we're looking at and and as Mr. Chilson said it, a race uh and a race often with our adversary and as they describe us, the enemy, which is China. What can we learn as the United States from an energy perspective from China in winning this race?
▶ 1:18:18Well, that's uh speed matters, I guess, would be the the short answer that the Chinese are very good at building nuclear plants in four years, new ones. Well, hold on a second. China also provides 85 somewhere in that percentage of solar panels and solar panel related battery correct material.
▶ 1:18:36Why aren't they if they provide that and they're so good at that, why aren't they using those things to meet their Paris climate accord uh requirements and to show the world that this works for winning this race? Why aren't they doing that? Well, I think not to be a cynic, they are doing that. Of course, they're building everything, but they're also building coal plants at a fuel pace as well. And uh they produce over 95% of the silicon needed for photovotayic cells in the world on coal fired grids.
▶ 1:19:05About twothirds of their grid is coal fired as you know. And the location of the energyintensive manufacturing of polysilicon to make photovotayic cells is on the coal intense part of the grid. So ch China recognizes that power is fundamental that getting it quickly and inexpensively matters. I'm I'm not endorsing China's um environmental policies, however, because neither am I. I think we can we can thread the needle in between the two.
▶ 1:19:31I was um uh pleased to hear that you're from the district that I visited on March 28th, 1979. Not to date myself, but I I lived there on at that time. We may have bumped into each other. Still do. I spent the week of the accident uh at the site and uh spent the next half dozen years of my life defending the virtues of nuclear energy unsuccessfully, obviously. since we abandoned it largely. But it's coming back. Awesome news.
▶ 1:19:57I think the refurbishment of TMI is a very a very good sign because it's it's possible to bring that back online. There's only maybe a half dozen reactors like that. But you, if I may answer the question, why did Microsoft choose that? It chose that because you can quickly get an enormous amount of highly reliable power. And of course, Microsoft likes the fact that it's non-combustion power. highly reliable, highly efficient, highly affordable, right? Yes, sir.
▶ 1:20:23All the above, but they didn't ask for, you know, you can put up a lot of solar panels quickly, too, right? Yeah. I think I think you're going to to be fair, I think you're going to see both. So, if you look what's going on Louisiana with the the large new meta facility, it's three gigawatts, like three three or four three mile islands worth of power requirements, and they're going to build windmills, solar arrays, and and almost three. Would they be doing that without federal and state subsidies for the for the non-traditional power sources?
▶ 1:20:52I I am skeptical that they would, but I think I think I think given the amount of money these companies have, I share Mr. Sloum's view that these are very deep pocketed organizations. I think they would still, this is my suspicion, I'm all for getting rid of all the subsidies. I'm on record frequently before Congress on this. I think that they would still build a lot of solar and wind, but a lot less of it than they are now doing. I yield. Thank you.
▶ 1:21:19I now recognize the gentleman from Louisiana, Mr. Higgins. Thank you, Mr. Chairman. Mr. Mills, can you can you can you clarify for America what is the what is the consumption of energy that's that we're talking about here as Americans try to grasp um you know what's the difference between a a data center requirement and and what kind of energy does AI draw why is that different
▶ 1:21:49from a business or home will you will you explain what we're talking about regarding the needs for the consumption of of energy from our clearly it has to come from our existing grid of the the grid that we envision modernizing in the near future if we're to participate in this uh this this global competition to lead the the emergence of AI and data technology.
▶ 1:22:20So could you clarify for America about how much energy is required for this? Well, it's it has surprised a lot of people, Mr. Congressman, as you know, it's uh the computer age began. I was part of the beginning of the computer age as a young man designing and manufacturing microprocessors and very few people thought about computers in city-size power consumption terms at that at that time. There were a handful of forecasters who expected that to happen.
▶ 1:22:48I'll say again it happened because we make computing so efficient. Uh the goal of making computers faster is to you have to make them more efficient. This is sort of the central requirement. But what it means in simple terms is uh well everything we do if you you know we're we're broadcasting this uh hearing live to the internet and of course that consumes energy. It's just hidden energy. Uh and it consumes roughly as much as the the people that are watching it.
▶ 1:23:15person, their energy share of watching this hearing online is roughly equal to if they took a bus ride 10 or 20 miles. But may I ask if I can interject while a gentleman's explaining Americans are watching something else if they're not watching this. That's true. And and the lights are on in this place whether anyone's in this room or not. It's all using energy. The energy that you know the cameras are plugged in. So yes, regarding data centers, there's a there's a a failure to to grasp.
▶ 1:23:45It took me a while to grasp and I'm asking you to clarify for America. Why do the envision data centers and AI technology? Why is the consumption of energy so massive? Because the quantity of information processed is even more massive. So a single data center now typically uses more power than a steel mill. We are building them by the hundreds and we're not building hundreds of steel mills although it would be nice if we built a few dozen.
▶ 1:24:13So the the magnitude of information processing that goes on and we measure this in bytes which has no meaning. It's a is a term that is exotic but we used to be amazed at a gigabyte and you know megabytes these are measured in numbers that are literally astronomical.
▶ 1:24:31the quantity of data being processed and will be processed to do everything that we've heard from this these our witnesses my colleagues uh it will keep expanding whether it's medical care or entertainment okay so our existing grid cannot hand if we were to win the race we don't have the grid to to carry the victory do we correct that's correct sir that's right so modernization of the grid it across the country is is would you say that's a that's a paramount consideration modernization
▶ 1:25:02of the grid and the opportunity for private players to produce power that doesn't have to be on grid. Yes, sir. Both. Roger that. Okay. It was brought up earlier regarding the need for fresh water for for for cooling. Can you comment on that from an energy perspective? Cooling is a challenge. These are very hot processors. They the surface of each chip is hotter than the surface of the sun. It's a crazy crazy number. It's hard hard to cool them. It takes a lot of water.
▶ 1:25:27I think what you'll see increasingly is data centers cited where there aren't water challenges and there are not transmission challenges but because commonly some of the le the least expensive energy sources are where you also have some of the least water. That's a challenge. That's correct. Is that correct? That is correct. Awesome. So these are serious challenges. Um in my remaining half a minute uh Mr. Levi would you please address the supply chains?
▶ 1:25:56We have cons we have concerns regarding materials and components necessary for us to engage in this competition that we intend to win. Thank you, Representative Higgins. I very much appreciate the question and yes, we have some very significant supply chain constraints uh much of which is really electrical components and it's a matter of finding transformers, switch gears. Should we be building those components in America?
▶ 1:26:23Sir, we should and as an industry, we're leaning into supply chain to try and source as much here as we can. Yes, sir. Roger that. Thank you, sir. Mr. Chairman, my time has expired. I yield. Thank you. I now recognize the gentle lady from North Dakota, Mrs. Fedorch. Thank you, Mr. Chairman, and thank you for the opportunity to sit in on your committee uh today.
▶ 1:26:46I'm a a member from North Dakota, a new member, and I um am on the energy and commerce committee, but am very interested in this issue, particularly the powering of America's AI industry. I spent 12 years as a utility regulator, most recently was president of the National Association of Utility Regulators.
▶ 1:27:10So, I'm very familiar with a lot of the issues regarding our energy markets, the signals we're sending to our energy markets. Um, the massive uh increase in demand that we're talking about here, when I look back on the 12 years as a regulator in my state and we served during a time of energy boom. So, we saw a demand increase, it was still like 3%.
▶ 1:27:37So when you look I was in a meeting this morning with PJM and they said that their peak demand today is 150 gawatts and they're looking in 5 years to be at 185 gawatt. That is mindblowing. That is astounding. And to meet that demand I appreciate uh requires a level of development that we have never before done.
▶ 1:28:03There's no um time in history that we've grown that much power and connected it to the grid that quickly. So with that, I have just a couple questions for you experts and I invite you to participate. We've got a working group uh my office has led on AI and energy. We want to try to get some solutions and a a policy framework for solutions to bring to the table on this very issue.
▶ 1:28:27But what um what types of efficiency upgrades can we count on I hope to mitigate that power demand increase because I'm AI is getting more and more efficient and hopefully we'll some of these projections will come down because of efficiency increases and improvements. So for any of you I invite you all to comment on that. Maybe with you Mr. Mills you want to start?
▶ 1:28:56Now the the efficiency the rate of improvement in energy efficiency of compute uh in GPUs is faster than the vonted moors law efficiency gains and the rate of efficiency gains in in the cloud are even faster yet because efficiency gains in and the transmission of information and the memory systems all the associated are going extremely fast.
▶ 1:29:19What's happening is that the demand for the product software is growing even faster because what efficiency gains do in computing is it makes the computing cheaper, easier, faster which for quite a long time is going to overtake all of the you know ostensible efficiency gains. I think the principal solution will come from and I will say I endorse a blend of what Mr. Sloukcom has said and what a lot of other people are saying uh to your point that we can't build that much capacity that quickly.
▶ 1:29:49It it looks like we can't for a whole set of supply chain reasons. So, we're going to have to figure out how to meet the demand for the services while moderating the incredible demand for power. I think one of the solutions will be uh increased use of where the utility industry was a 100 years ago, which is loads this big, which are industrial class loads. They're purely in the sort of refinery steel mill.
▶ 1:30:16Will increasingly see on-site generation, independent generation, and even co-generation. Co- in the sense of not heat and power, but peak shaving for the grid without costing consumers money. Every utility I talk to, every utility CEO uh does not want to raise the costs of their electricity for their consumers to serve industrial load. This has been a a difficult challenge for sure. Thank you. Thank you, Representative.
▶ 1:30:46Go ahead. Were you finished? Um do I have another minute? Yes. Yes. Sorry, Mr. Le I appreciate the question, Repres. You know, I would just add that data centers are highly efficient facilities, but they also enable energy uh savings and efficiencies economywide. Uh I talked earlier about just, you know, the changes in the last 15 years walking into a data center, the ambient temperature inside, you know, servers generate heat. Uh you know, early days you had to wear a windbreaker going into a data center because it was that cool, right?
▶ 1:31:15Uh now ambient temperatures have have increased substantially. You know, you can go into data centers that are 80 degrees or higher, and that's that that's that's part of the energy efficiency gains that we've got within the data centers if we're looking at cooling, but I also think it's important to recognize the role of data centers uh in enabling energy efficiency for others.
▶ 1:31:32Whether you think about smart thermostats, whether you think about gets and dynamic line monitoring or or any number of technologies that are utilized by consumers, that are utilized by businesses, utilized by government, uh all of those rely on the digital infrastructure that data centers are providing. And I think there's not only substantial uh recognition within the data centers, but certainly economywide of the efficiencies gained. Thank you. I'm out of time, but I will say North Dakota has cool air and we're flaring gas.
▶ 1:32:00So come there, use that gas and generate power. Thank you. Appreciate I yield back. Thank you. I now recognize the gentle lady from Colorado, Mrs. Boowart for five five minutes. Thank you, Mr. Chairman. Mr. Chilson. um AI as rise, it really offers a dual lifeline. Um coal as a a power bridge and AI uh as a transition engine.
▶ 1:32:25Do you believe that they're both crucial uh to keeping rural communities uh from collapsing? Uh I do I'm I'm I'm more of an expert on the AI side, so I'll address that. I do think that we are seeing that intelligence in the form of uh you know connected from here but two big data centers is a benefit across the um economic spectrum uh and and that everybody can benefit from this.
▶ 1:32:51We've seen some good research that shows that in fact uh AI uh tools help help benefit actually people who are uh newer or less capable in certain types of jobs um to really level up their skills quickly and they they're sort of diminishing returns at the top end and so there's been some good research on this.
▶ 1:33:12So I do think that across the economy we will see huge benefits to this technology um including in rural uh areas that maybe not have not historically received the the benefits of high technology. Awesome. Thank you. And and Mr. Mills, you stated that uh AI data centers will require the equivalent of uh adding an entire state's worth of power generation um just in the next few years alone. Um it I I believe that that's true.
▶ 1:33:39Um, and if if so, how can anyone seriously um argue that wind and solar um are going to be enough for all of this? Well, people do seriously argue that of course, but the and it's not that it's technically impossible to build enough wind and solar and batteries. It's these things, you know, engineers can do a lot of things if you give them enough money. The the issues are really how much we've given them a lot already. I haven't seen True. Yes. I haven't seen it produce anything. It's a it's a it's really a velocity question and location question.
▶ 1:34:09I think what you'll find and we're already seeing this you're seeing some uh plans for blended like as I mentioned Louisiana where you're blending solar and gas turbines and what you'll find is you can reduce the number of gas turbines have and the amount of gas you're consuming by using enough of them plus wind and solar and that that's going to keep happening because the absolute quantity demand is so great that I think the industry is going to chase everything they possibly can.
▶ 1:34:34it it's uh it's not that they're totally price insensitive, but they're and this is my opinion that they don't but they're close to price insensitive in a sense the product is so important and the velocity is so important that they'll pay a premium including I suspect uh and I that the utilities have much more negotiating power than they realize and some of the utilities I think are recognized that they can negotiate uh construction arrangements and business arrangements that don't impact consumers increase rates Right.
▶ 1:35:03And I I would think that we see such a blended form of energy right now because there were so many subsidies. Uh and without the subsidies, it it may not be um as much of a blend. We're all fine with all of the above energy. Um but when we're shutting down uh coal plants in rural communities like in Colorado and uh putting that energy aside and then saying we're going to replace it with 6,000 square acres of solar panels. Um but we don't have the transmission lines and we don't have the funding for that yet.
▶ 1:35:30Um and and when this is so crucial, um with with AI's rise, um I think it's imperative that we have that reliable source and stop demonizing fossil fuels. Uh we have some coal plants that are being converted into um LG facilities. Um and then I I would love to see um SMRs come to the surface too have have these small modular reactors uh in in places.
▶ 1:35:51And um so um it do you believe that the energy policies that we've seen have actually kind of slowed down the progress um potentially in in AI's uh development to to a significant extent. Yes. Because when you do asymmetric subsidies this the solar and wind industry are no longer nent small industries that need a boost with subsidies. They're massive uh industries globally huge supply chains. They no longer need massive subsidies.
▶ 1:36:19So it has distorted how the market would respond. And you probably know that both in Georgia and Illinois there have been uh delays or cancellations of coal plant shutdowns precisely because the need for adequate and dispatchable power. I hope that that spreads to other states and we slow down as well. And in fact, I'll make a prediction. Uh it will make some of my green friends heads explode to use that expression. But I do think you're going to see a coal plant built to fund data centers. That's happening in in Asia.
▶ 1:36:50Yes. And in Vietnam and in uh China's building some 200 coal fired energy plants and selling us solar panels. Yes. Uh but to your point um you know we we have we have coal plants in in Colorado that are reduced down uh from three stacks to one. And um if if in five seconds could you just explain simply how much energy we need to supply this? What does that look like to the average person?
▶ 1:37:15the this uh a single refrigerator size computer rack in a data center and there are thousands of racks a single one uses more electricity than 50 Teslas or any other electric car. So it gives you a sense when you build millions of those you're adding the equivalent of hundreds million new EVs to the road in a couple of years. Yes. And just for the record um EVs don't have gas pedals, they have coal pedals. Thank you. Thank you.
▶ 1:37:43And with that, um, I now yield to ranking member Frost for closing remarks. Thank you, Mr. Chairman. Thank you so much to the witnesses for being here today. Um, there's no doubt we can credit AI for exciting advancements, including in the field of healthcare, education, and much more. Congress's job must be to support those advancements, but also couple them with responsible safeguard policies.
▶ 1:38:07U being on science uh u um and technology committee I know the importance of maintaining a competitive technological edge against our adversaries in AI and other technologies like quantum computing chip manufacturing and space exploration. Um at the same time we can't let our fear of our foreign adversaries turn into a scorched earth AI policy that can do really real harm to the health and pocketbook and autonomy of people here at home. We heard a little bit about that from a few of the members here today.
▶ 1:38:37uh not anti-AII, anti-ino innovation, but the balance is so important, especially as we look decades into the future and and I agree it's exciting. You know, work on legislation that helps create the innovation sandbox that was brought up, but we have to ensure that the communities don't get buried in the sand, and that's part of our job as legislators. So, I appreciate everyone being here today, and I yield to the ranking member. Thank you everyone um for coming today.
▶ 1:39:07Uh as we've heard, AI has a promising future for transforming the ways that various sectors of our economy operate. But for this future to be realized, there are very real challenges that Congress and the administration should consider. Workforce challenges highlight the need for improved training and education in the fields that are necessary to support this transition. I can think not too far.
▶ 1:39:34I w I was graduating college during the dotcom and when when people thought of programmers, they thought of people that use punch cards, machine learning language, it completely changed the industry and ushered in an entire new generation of of software engineers like The processes for increasing energy infrastructure required for the operation of power intensive AI uses uses are greatly in need of reform particularly
▶ 1:40:05as it relates to permitting and regulatory barriers. A recent report by the competitive enterprise institute titled powering intelligence meeting AI's energy needs in a changing electricity landscape highlighted many of these reforms and I'm asking unanimous consent to enter this into the record.
▶ 1:40:25Without objection so ordered finally any consideration of regulation of the development and use of AI must account for the needs of innovation and competitive markets. One can only imagine the many the unlimited number of potential business ideas and ventures that might spring forward um from very nuanced or niche or sometimes very very impactful largecale companies um from from this uh transformation.
▶ 1:40:57AI is creating more efficiency by greatly reducing the time needed to complete tasks that would take far longer to complete without this important tool. And while we are in a global race for leadership in this rapidly evolving field, American innovation has proven has a very proven track record of leading the way when it comes to being innovative.
▶ 1:41:20And the Trump administration recognizes this incredible potential and the prosperity that it will create both within our borders and in the economies around the world. Achieving this moonshot will require action by both Congress and the administration to create an environment in which the tech innovators and the sectors supporting this industry can grow.
▶ 1:41:39I hope this conversation today has highlighted some of the many ways that Congress and the administration can take action to ensure that America can and will lead the world in AI for many generations to come. And with that, without objection, all members have five legislative days within which to submit materials and to submit additional written questions for the witnesses which will be forwarded to the witnesses for their responses.
▶ 1:42:07If there are no further business, without objection, the subcommittee stands adjourned.