Phoenix Is a Data-Center Mecca—and Test Case for How to Pay for AI’s Power Needs

A new style of architecture is rising in the sprawling suburbs of the Sonoran Desert: windowless data centers that hum 24 hours a day and guzzle as much electricity as a midsize city. As Microsoft and other tech giants expand their footprints in one of the nation’s largest data-center markets, a high-stakes battle is unfolding over how to pay for the massive power-grid upgrades needed to drive the AI revolution.  Arizona Public Service, the state’s largest utility, sits at the center of the firestorm. APS is proposing a 45 percent electricity-rate increase for “extra-large energy users,” primarily data centers, and a roughly 14.5 percent increase for residential customers. Nearly everyone is unhappy.