Data centers have become the largest driver of a surging electricity demand that is straining US power grids. But the AI data center boom has also accelerated investment in a technology that could provide a silver lining for everyone—solid-state power transformers that replace industrial-age technology with modern power electronics.

Power grids currently rely on conventional transformer technology that is painstakingly assembled by hand and has a fundamental design dating back to the 1880s. Two copper wire coils manually wound around a steel core create electromagnetic fields that help step up voltage levels of alternating current electricity for long-distance transmission or step down voltage levels for the electricity use of homes and businesses. The largest power transformers cannot be mass-manufactured but are instead custom-built for each utility company’s electrical substations.

Manufacturing constraints, coupled with the scramble to upgrade US power infrastructure, have meant utility companies and other customers must wait up to several years for delivery of new power transformers. That not only hinders power grid infrastructure expansion needed to support growing electricity demand, but also delays the process of replacing aging power transformers.

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US manufacturers in many Rust Belt cities and towns are paying significantly higher electricity costs as growing energy demand from data centers strains the largest power grid operator in the United States. The resulting squeeze on profit margins for steelmakers and brick factories could further undermine President Donald Trump’s “Made in America” plan to revive US manufacturing, and it comes as Trump has simultaneously championed the tech companies behind the AI data center boom.

Factory electricity bills are generally rising faster than those for other business customers or residential customers, according to a Reuters analysis. It highlighted the example of the Belden Brick Company, a 141-year-old brick manufacturer in Ohio, whose electricity bills have soared from $1,600 to $12,000 per month due to a higher monthly capacity charge in the 13-state region served by the grid operator PJM Interconnection.

Meanwhile, the Steel Manufacturers Association warned that US steel companies concentrated in the Rust Belt region served by PJM Interconnection are paying tens of millions of dollars in higher power costs per year. Electricity accounts for 20 to 40 percent of the total production costs of making steel.

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