While all the focus has been on tariffs, two key components of President Donald Trump’s economic agenda remain energy and artificial intelligence. Once again, the president scored even more private investment for the energy sector and AI development without resorting to taxpayer-funded subsidies and handouts to attract companies to the United States.
Private Investment for Energy and AI
Artificial intelligence and energy are closely intertwined. To power AI applications, data centers, and other advanced technological endeavors, companies require massive amounts of energy. At a global scale, electricity demand from data centers is expected to reach approximately 945 terawatt-hours within the next five years. To put this into perspective, data centers will consume the same amount of electricity as the entire nation of Japan.
Appearing at the Pennsylvania Energy and Innovation Summit in Pittsburgh on July 15, President Trump announced a $90 billion private investment from several well-known companies aimed at transforming the Keystone State into an AI powerhouse.
“With that historic announcement and the new commitments being made today, we’re building a future where American workers will forge the steel, produce the energy, build the factories and really run a country like, I believe, like this country has never been run before,” Trump said in prepared remarks at the event.
The president noted that America will be at the forefront of every industry and "be the first in every technology, and that includes being the world’s number one superpower in artificial intelligence."
Corporate America agrees. As part of the latest wave of private investment, here is what these companies aim to achieve:
Anthropic plans to extend $1 million over three years to fund cybersecurity education for middle and high school students.
Blackstone will invest $25 billion in data centers and energy infrastructure in the northeast region of the state.
Google and Brookfield will partner to support two hydropower facilities.
Meta Platforms has pledged $2.5 million to Carnegie Mellon to finance small businesses in rural Pennsylvania.
This is all in addition to the trillions of dollars in private investment from domestic and foreign companies, be it Apple or Nvidia. Over the next several years, the private sector plans to invest in US energy, AI, technology, manufacturing, research and development, and skills training. It is a signal that the current administration wants to ensure that nearly every step of the supply chain is concentrated in the United States rather than in a foreign market.
Does America Have the Energy?
While Trump campaigned on an all-of-the-above strategy to energy production, the meat and potatoes of output will be centered on fossil fuels. The challenge, however, will be sustaining record production levels that have been prevalent over the last few years. According to the Energy Information Administration, domestic crude oil output is around 13.5 million barrels per day, far below Treasury Secretary Scott Bessent’s aim of 16 million barrels.
Market watchers are monitoring Baker Hughes' drilling activity data. The number of crude oil rigs operated by energy firms has been steadily declining since reaching a post-pandemic high of 627 in November 2022. However, the oil rig count has sharply declined this year, sliding to 424, the lowest level since September 2021.
The decrease in unsurprising as Trump has vowed to slash energy prices. Indeed, a barrel of West Texas Intermediate crude oil is trading around $67 per barrel on the New York Mercantile Exchange and is down about 8% this year. This is slightly above the breakeven point, which, according to the Federal Reserve Bank of Dallas, is an average of $65.
Put simply, the energy industry could be battening down the hatches and preventing oil prices from collapsing.
Meanwhile, the situation in California remains bleak as the Golden State is poised to lose 17% of its oil refinery capacity over the next 12 months. Closures are projected to cause "increases in fuel price volatility on the West Coast,” the Energy Information Administration said in a report.
Indeed, American Automobile Association data show that the average price for a gallon of gasoline in California is above $4.51.
Experts say that California could be an energy goliath, possessing vast reserves of crude oil. However, the state imports most of its fuel needs and maintains a series of costly anti-energy policies, including the nation's highest gas tax, cap-and-trade, mandated boutique fuel blends, and a low-carbon fuel standard.
Drill, Baby, Drill
The mantra of the Trump 2024 election campaign was “drill, baby, drill.” But do America’s energy behemoths have the appetite to drill when it is not highly profitable? A recent forecast from Goldman Sachs suggests that oil prices will hover around $66 per barrel in the second half of 2025, roughly in line with breakeven levels. This will likely ensure companies continue to produce but not overextend themselves to the point of sending prices plummeting.
At the same time, if AI follows through on Wall Street’s ultra-bullish projections, demand for reliable fossil fuels will rocket, making Pennsylvania and other oil-producing states great again.
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