Google Signs First US Demand-Response Deals for AI Data Centers

Google signed its first formal demand-response agreements with two U.S. electric utilities, Indiana Michigan Power and the Tennessee Valley Authority, to manage the electricity loads of its artificial intelligence data centers. The initiative allows the company to curtail or shift non-urgent machine learning workloads to off-peak hours when the electric grid is under less stress, particularly during peak weekday afternoons and evenings.

In Fort Wayne, Indiana, the company filed a joint contract with Indiana Michigan Power for a new $2 billion data center. Utility officials stated the partnership helps maintain reliable and affordable service for residential and business customers while managing the increased load caused by AI. This model, previously piloted by Google in Europe and Taiwan, addresses a broader power crunch where AI energy requirements have outpaced available supplies. The U.S. Department of Energy projects that data centers will consume 12% of all U.S. energy by 2028.

To further secure clean baseload power, Google has entered agreements with AES Corporation, NV Energy, Commonwealth Fusion Systems, and Kairos Power. This shift occurs as the data center industry increasingly turns toward nuclear energy, including Small Modular Reactors, to meet carbon-free goals. While grid operators like Southwest Power Pool and PJM Interconnection explore similar incentives for flexible data centers, some critics warn that such flexibility could prolong the use of fossil fuel resources in markets with low renewable energy.