The biggest issue facing new data center development is time to power. In an effort to attack this problem head on, the Trump Administration has launched an ambitious federal infrastructure initiative, hoping to fundamentally reshape the regulatory landscape for data centers and energy projects through a newly-published AI Action Plan and supporting executive orders.
On July 23, 2025, the White House unveiled "Winning the Race: America's AI Action Plan," a roadmap for the Trump Administration's AI policy priorities.1 The AI Action Plan was based on three pillars that the Trump Administration hopes will secure America's AI leadership:
- Pillar I: Accelerating AI innovation by removing regulatory barriers and empowering the private sector.
- Pillar II: Building America's AI infrastructure needed to support AI at scale.
- Pillar III: Establishing American AI as the global standard through diplomacy and security.
Following the release of the AI Action Plan, President Trump signed a trio of executive orders that begin to implement several recommendations in the AI Action Plan. These executive orders focus on American technology exports, AI procurement standards, and domestic infrastructure, which all factor into the core of the administration's broader goal: "Winning the Race" for AI leadership.
Our AI Task Force team prepared a detailed write-up of the AI Action Plan, which can be found here, and the three new AI Executive Orders, which can be found here.
Supporting energy development and data center buildouts is central to the AI Action Plan. With over 90 federal policy actions planned for implementation in the coming weeks and months, understanding the specific requirements, deadlines, and opportunities created by these initiatives is critical for the industry. This article serves as a practical guide for understanding the new regulatory framework as it is implemented, as well as competing state and local interests.
Data Centers and Energy as the Cornerstone of the AI Action Plan
Pillar II of the AI Action Plan begins with a recognition that "AI is the first digital service in modern life that challenges America to build vastly greater energy generation than we have today[]"2 and identifies energy infrastructure as the primary constraint of American AI leadership. The scale of infrastructure required for AI development has fundamentally changed project economics and regulatory considerations. Data centers supporting advanced AI workloads now routinely require over 100 megawatts of power capacity, with some projects starting to require over a gigawatt or more.3 These facilities represent billions of dollars in capital investment and require sophisticated energy solutions that can deliver reliable, continuous power at unprecedented scales.
Several of the recommendations in the AI Action Plan focus on streamlining permitting and environmental reviews for data centers and energy projects4; developing the country's power grid5; and supporting the development of high-security data centers for military and intelligence community usage.6 Through his executive order on "Accelerating Federal Permitting of Data Center Infrastructure,"7 President Trump immediately adopted many of these recommendations and set aggressive timelines for their implementation.
Understanding the New Regulatory Framework
Although there are several changes that benefit smaller providers, the combined impact of the AI Action Plan and the new executive order on accelerating data center infrastructures focuses on enabling massive projects.
Qualifying Projects: The order designates "Qualifying Projects" – large-scale data center and energy infrastructure projects – for expedited environmental reviews and other regulatory approvals.8 This applies to:
- Data centers requiring more than 100 megawatts of new load for AI operations;
- Infrastructure projects with capital expenditures exceeding $500 million;
- Projects that protect national security; or
- Projects that have otherwise been designated by the Secretary of Defense, the Secretary of Interior, the Secretary of Commerce, or the Secretary of Energy as a "Qualifying Project" (a discretionary catch all category).
Energy projects supporting these data centers, including generation facilities, transmission infrastructure, and grid interconnections, are also eligible for expedited treatment when they directly support qualifying data center projects. This integrated approach recognizes that successful AI infrastructure development requires coordinated investment across the entire energy value chain.
Streamlined Environmental Review: The order contemplates several actions to streamline the environmental review process for AI infrastructure. For example, it directs the identification of existing and consideration of new categorical exclusions under NEPA for data center projects. It also establishes "[f]or the purposes of this order, Federal financial assistance representing less than 50 percent of total project costs shall be presumed not to constitute substantial Federal control and responsibility,"9 which would require extensive review.
FAST-41 Integration: Perhaps the most significant procedural change involves the automatic inclusion of qualifying AI infrastructure projects in the FAST-41 permitting framework. This program, originally designed for major infrastructure projects, provides coordinated federal agency review, defined timelines, and public transparency through the federal Permitting Dashboard.
Under the new executive order, the FAST-41 Executive Director may designate qualifying projects as covered projects within 30 days of agency notification. Once designated, projects must be published on the Permitting Dashboard within another 30 days, providing public visibility and accountability for the permitting process. This transparency mechanism helps with keeping federal agencies accountable for meeting expedited timelines under the broader AI Action Plan programs.
Leveraging Federal Resources and Incentives
In addition to easing regulations for data center and energy projects, the AI Action Plan and executive orders provide resources and incentives to support these projects.
Financial Support Mechanisms: The order tasks the Secretary of Commerce with launching a comprehensive financial support initiative for qualifying AI infrastructure projects. This support could include "loans and loan guarantees, grants, tax incentives, and offtake agreements," as well as other "relevant existing financial support that can be used to assist Qualifying Projects, consistent with the protection of national security."10
Although these programs are just being developed, there may be overlaps between or expansions of programs, such as the CHIPS Program Office's mandate to support semiconductor manufacturing or tax incentives from the Department of Treasury's guidance for AI literacy and skills developments programs.
Federal Land Utilization: In a significant policy shift from the previous administration,11 the order directs the Departments of Interior, Energy, and Defense to identify and make available suitable federal lands for data center development, which could include military installations where appropriate, subject to security considerations.12 This could enable data centers and the necessary energy infrastructure to be constructed without the oversight of the state governments where these projects are located, eliminating lengthy permitting processes and potentially bypassing local utilities regulations.
State and Local Considerations: The Limits of Federal Streamlining
While the Trump Administration's federal initiatives represent a significant acceleration of permitting timelines, they cannot eliminate the complex web of state and local oversight that governs energy and data center developments. Projects must still navigate state public utility commission approvals, local zoning and land use requirements, and state environmental regulations that often exceed federal standards. For energy generation projects in particular, the regulatory approval process remains heavily contested at the state level, with natural gas plants facing especially intense scrutiny and litigation from environmental groups and community stakeholders. Even with the expedited federal permits in hand, developers may find themselves engaged in protracted battles at state regulatory proceedings and in state courts.
The physical realities of energy infrastructure present additional challenges beyond federal control. Natural gas generation, likely to play a significant role in meeting near-term AI data center demands, requires not just plant construction but reliable fuel supply. Pipeline capacity constraints are particularly acute in regions experiencing rapid data center growth, such as the mid-Atlantic and Southeast corridors outside the Gulf Coast's extensive pipeline network. Interstate pipeline expansions face their own multi-year permitting processes across multiple jurisdictions, and existing infrastructure is already operating at or near capacity in key markets. These constraints cannot be resolved through federal executive action alone.
Perhaps most critically, successful project implementation requires active cooperation from incumbent utility companies, regional transmission organizations, and state governments that may have different priorities than the federal AI infrastructure agenda. Some states have their own aggressive renewable energy mandates and climate goals that may conflict with rapid buildout of dispatchable generation resources. State-level resistance to Trump Administration initiatives could manifest through deliberate delays in state permitting processes, legal challenges to federal preemption, or simple non-cooperation in planning and interconnection processes. At the same time, states that have historically aligned with the Trump Administration's agenda are enacting laws that may benefit projects that are looking to take advantage of the new federal programs. For example, Texas recently signed Senate Bill 6, which establishes a regulatory framework to manage the rapid growth of consumers with high electricity demand in the state, particularly data centers and cryptocurrency miners. Developers must therefore craft strategies that align not only with federal objectives but also navigate the complex landscape of state energy politics, local community concerns, and utility company planning processes that ultimately determine whether projects can deliver power to data centers when needed.
Keeping up with Developing Policies, Guidance, and Incentives
The Trump Administration promises to move quickly to "Win the Race" for AI leadership. Although several key programs recommended under the AI Action Plan and recent executive orders are not yet implemented, the compressed implementation deadlines warrant immediate strategic planning and action.
Under the Executive Order on Accelerating Federal Permitting of Data Center Infrastructure, there are already key dates to watch in the coming days and months:
- By August 2, 2025, all relevant federal agencies are required to identify existing NEPA categorical exclusions applicable to data center and supporting infrastructure projects. These categorical exclusions exempt qualifying projects from detailed environmental impact statements and other environmental requirements.
- By August 22, 2025, the 30-day window is set to open for FAST-41 project designations. Companies with projects potentially meeting the qualifying thresholds should prepare comprehensive applications demonstrating their eligibility for covered project status if they plan to gain the benefits of the coordinated federal review and expedited timelines called for in the AI Action Plan.
- By January 2026, the EPA Administrator must develop specific guidance for expedited environmental reviews of data center projects on Brownfield and Superfund sites. The Secretary of the Army must also review and potentially expand nationwide permits under Clean Water Act Section 404 to better accommodate data center development.
And, of course, the development of new financial support initiatives may enable additional data center and energy projects in the coming months. With key deadlines approaching and federal agencies racing to implement new programs, companies must move quickly to position themselves for success. Although no specific deadlines were assigned to the AI Action Plan's vision of developing "a Grid to Match the Pace of AI Innovation,"13 the inclusion of energy projects in the executive order on Accelerating Federal Permitting of Data Center Infrastructure also applies broadly to their energy infrastructure needs.14
As regulators, developers, and stakeholders work together to implement these orders, their collective ability to navigate these complexities will ultimately determine whether this ambitious framework achieves its goal of securing America's position at the forefront of the global AI revolution. The success of this initiative will depend not only on federal action but also on how effectively the private sector can align its investment with these new opportunities while managing the inherent risks of such rapid regulatory change. For companies in the energy and data sectors, understanding these evolving requirements and maintaining flexibility in their strategic planning will be essential as this unprecedented federal framework takes shapes over the coming months.
Footnotes
1. Winning the Race: America's AI Action Plan, White House (July 23, 2025) [hereinafter "AI Action Plan"], available at https://www.whitehouse.gov/wp-content/uploads/2025/07/Americas-AI-Action-Plan.pdf.
2. AI Action Plan, p.14.
3. See, e.g., Mark Zuckerberg says Meta is building a 5GW AI data center, Maxwell Zeff, TechCrunch (July 14, 2025), available at https://techcrunch.com/2025/07/14/mark-zuckerberg-says-meta-is-building-a-5gw-ai-data-center/.
4. AI Action Plan pp. 14-15.
5. Id. pp.15-16.
6. Id. p.16.
7. Executive Order, Accelerating Federal Permitting of Data Center Infrastructure (July 23, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/07/accelerating-federal-permitting-of-data-center-infrastructure/.
8. Id.
9. Id.
10. Id.
11. See, e.g., Executive Order 14141 (Rescinded), Advancing United States Leadership in Artificial Intelligence Infrastructure (January 14, 2025), available at https://www.federalregister.gov/documents/2025/01/17/2025-01395/advancing-united-states-leadership-in-artificial-intelligence-infrastructure.
12. Executive Order, Accelerating Federal Permitting of Data Center Infrastructure (July 23, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/07/accelerating-federal-permitting-of-data-center-infrastructure/.
13. AI Action Plan, pp.15-16.
14. Executive Order, Accelerating Federal Permitting of Data Center Infrastructure (July 23, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/07/accelerating-federal-permitting-of-data-center-infrastructure/
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