Trump proposes data center tax to fund AI, tech industry confused

Washington – The White House announced a proposal to impose a federal levy on data‑center operators as part of President Donald Trump’s broader strategy to accelerate the United States’ position in the artificial‑intelligence (AI) competition. The measure, outlined in a draft executive memorandum released on Tuesday, would assess a percentage of revenue generated by facilities that house large‑scale computing equipment, with the proceeds earmarked for federal AI research grants, workforce training programs, and infrastructure upgrades.

Industry groups and leading technology firms responded with statements indicating confusion over the policy’s rationale and potential impact. The Information Technology Industry Council noted that the tax could raise operating costs for data‑center providers, potentially slowing the deployment of high‑performance computing resources essential for AI development. Major cloud service providers, including Amazon Web Services, Microsoft Azure, and Google Cloud, requested clarification on the tax rate, exemption criteria, and timeline for implementation. Congressional committees overseeing commerce and technology have scheduled hearings to examine the proposal’s economic implications and its alignment with existing tax legislation. The administration has indicated that a final rule could be issued before the end of the fiscal year, pending stakeholder feedback.