New York, Jan 13, 2026, 16:04 EST — After-hours
- Microsoft shares dropped roughly 2% as investors digested efforts to ease criticism over data-center energy and water use.
- The company committed to covering its electricity expenses and to releasing water usage data for its U.S. data centers.
- Attention now turns to Washington’s next move and Microsoft’s earnings call on Jan. 28.
Shares of Microsoft (MSFT) slipped 1.8% to $468.44 in after-hours trading Tuesday following the company’s announcement of a new strategy aimed at preventing its rapidly expanding data-center operations from inflating consumer power bills.
The shift comes as utilities and state regulators scrutinize who should foot the bill for grid upgrades needed to support artificial intelligence. With data centers consuming large, consistent amounts of power, pushback from local communities has begun to stall some projects in certain markets.
For Microsoft, resistance isn’t just a permitting snag anymore. It’s tangled up in the AI investment debate—how much capital to funnel into data centers and if the payoff comes quickly enough.
Microsoft committed to paying utility rates sufficient to cover its data-center energy costs and collaborating with local utilities to boost supply as needed. The company also promised to replenish more water than its U.S. data centers consume and to release water-use data for each U.S. data-center region. Vice Chair and President Brad Smith described it as “unfair” for the public to bear higher electricity costs connected to AI. (Reuters)
President Donald Trump, known for pressing tech firms on soaring living expenses, said Monday that Microsoft will implement “major changes” this week to prevent Americans from facing higher electricity bills linked to data centers. He added that his administration is collaborating with other tech companies and expects to reveal further updates in the weeks ahead. (Reuters)
Politics are clashing with the numbers. U.S. electricity prices jumped 6.7% over the year ending in December, a Reuters report linked partly to increased demand from data centers amid the AI investment surge. (Reuters)
Investors are searching for AI exposure beyond the usual megacap tech stocks. On Tuesday, BlackRock revealed that its surveyed clients prefer power and infrastructure companies amid the data-center boom, which raises concerns over shaky returns and rising debt. Ibrahim Kanan at BlackRock stressed the growing need to “risk-manage megacap and AI exposure.” (Reuters)
Goldman Sachs remains bullish on Microsoft, reaffirming its buy rating and raising the price target to $655. Analyst Gabriela Borges highlighted that Microsoft is positioned to come out ahead “in multiple ways” amid the evolving AI landscape, Barron’s reported. (Barron’s)
But the fresh commitments carry a downside: they might boost Microsoft’s operating expenses, though the company hasn’t disclosed a budget for the plan. If utilities resist new rate structures or local opposition grows, the AI data-center rollout could slow and complicate matters.
Microsoft’s fiscal Q2 earnings call on Jan. 28 is shaping up as the next major event. Investors will dig into Azure demand, capital expenditures on data centers and gear, and how the new “pay our way” commitment might impact margins. (Microsoft)
