America's AI Action Plan: A Radical Shift in U.S. Data Center Development Strategy

The Executive Order, titled “ ACCELERATING FEDERAL PERMITTING OF DATA CENTER INFRASTRUCTURE” as signed by President Trump on July 23, 2025, aims to streamline federal permitting for AI-centric data centers—facilities requiring over 100 MW of power. It directly implements the mandates of Pillar II of the America’s AI Action Plan, also announced this July, which frames AI infrastructure as a cornerstone of U.S. economic and national security policy.

Together, these two documents reflect what has the potential to become a radical shift in U.S. data center development strategy. It provides a path away from market-constrained, sequential, and regulation-heavy projects and toward federally coordinated, defense-aligned, and energy-integrated hyperscale deployment.

There is nothing subtle about the President’s approach to the future of large-scale data center projects. His preamble to the AI Action Plan states:

By aligning executive action with a national strategy, the White House is defining a fast lane for building AI-ready data centers. What was once a fragmented, slow-moving, and often speculative process is now becoming federally coordinated, accelerated, and mission-driven.

This dual framework is not just about faster permitting, it’s about reshaping the national industrial base to meet the scale, urgency, and geopolitical stakes of the AI era, and is certainly moving the political component of AI data center development from worry about NIMBY issues to what is at stake worldwide.

What Qualifies for the Advantages of this Federal Involvement?

On the surface, the simplest qualifier is being an AI data center project with a demand for no less than 100 MW of power. But the announcement recognizes that data centers don’t get built in a vacuum and includes other criteria for covered projects and what are described as “Qualifying projects.”

Covered projects include the energy infrastructure necessary to operate a data center. Power development, pipelines for natural gas systems, transmission lines, collocated energy production all fall into this category. Meanwhile, the definition of a qualifying project not only has some very specific definitions, such as a minimum $500 million investment, but also projects that protect national security or have been designated a Covered Component or Qualifying Project  by the Secretary of Defense, the Secretary of the Interior, the Secretary of Commerce, or the Secretary of Energy, as appropriate.

Keep in mind that the AI Action Plan makes clear that U.S. leadership in AI is a matter of national security, which would seem to give any AI data center development project a step up in meeting the requirements for the benefits of the Executive Order, even if some of the initial requirements, such as the scale of the project, aren’t being met.

The benefits for meeting the definition of a project include:

·         Financial Incentives

o   Secretary of Commerce to create support packages: loans, grants, tax incentives, offtake agreements.

·         National Environmental Policy Act Categorical Exclusions

o   Agencies to apply or expand categorical exclusions for qualifying projects to avoid lengthy environmental reviews.  New or repurposed federal facilities such as data centers on Department of Defense (DoD) or Department of the Interior (DOI) land, can bypass Environmental Impact Statements (EIS), a process that traditionally takes 18–36 months.

·         FAST‑41 Integration

o   Projects can be added to the Federal Permitting Improvement Steering Council’s FAST‑41 process, which mandates transparency, fixed timelines, and dashboard tracking.

·         EPA Regulatory Reforms

o   EPA to expedite permitting under environmental laws (Clean Air, Clean Water, etc.) and identify brownfield or Superfund sites for redevelopment.

·         Energy Co-permitting

o   Authorizes joint fast-tracked reviews for data center power generation (including gas turbines, microgrids, nuclear SMRs, geothermal systems) alongside data center approvals.

·         Biological & Water Permitting Streamlining

o   Program-level Endangered Species Act (ESA) consultations and nationwide permitting for water-related activities.

o   Federal Land Use

o   Interior, Energy, and Defense departments to open federal and Defense Department lands, subject to security constraints, for qualifying projects.

How Does the Industry Benefit?

Simplified environmental review via categorical exclusions and FAST‑41 designations should shave months, if not years, off project timelines. And with federal-level permitting a certainty, this has the advantage of attracting private capital, while reducing sunk costs that happen due to project permitting delays.

The access to government-backed loans, grants, and tax credits will significantly reduce the capital costs for qualifying projects. The cost of money potentially becomes a more clearly identified number prior to the investment in the project. Capital markets will likely reprice risk and timeline for eligible projects. Investors may now pursue larger, longer dated, and more capital-intensive campuses with high confidence of federal support and permitting speed.

The $500M threshold, as opposed to the 100 MW requirement, significantly broadens the field for players in the market, though it might see more consolidation in data center projects with more large-scale, multi-tenant, high-impact data centers built, and not just single tenant hyperscalers, which can reshape regional competitive dynamics.

Power Notes

The focus on permitting for substations, transmission lines, pipelines, and dispatchable generation ensures data centers aren’t held back by local grid limitations, while the inclusion of nuclear, geothermal, and natural gas turbine components may foster hybrid energy ecosystems around data centers.

Greater encouragement of collocation power sources has the potential to add significant distributed power to the grid, which itself need to be reshaped and updated to support future development. With the DOE’s PermitAI and grid modernization funds being identified in the Action Plan and accelerated data center build-outs, we should expect to see new investment in grid-enhancing tech (e.g., advanced conductors, virtual power plants, long-duration batteries).

Developers can design co-located energy systems, such as gas peakers, geothermal loops, or even SMRs, at the outset, with regulatory reviews moving in parallel. This significantly reduces project execution risk.

The Executive Order instructs agencies to synchronize reviews and approvals of new energy facilities (transmission, natural gas, batteries), environmental mitigation, and water use and discharge permits (Clean Water Act).

Location and Permitting Notes

Finding data center sites will have expended options with Federal lands and repurposed Brownfield/Superfund sites becoming attractive alternates to rural tracts, potentially leading to eco-industrial reuse strategies.

Cities or states may use federally designated lands to develop tech parks in coordination with hyperscalers, expanding on the projects we have already seen where local governments designate areas specifically for data center project development. Prioritizing Defense and Interior Department parcels may give rise to dual-use data center campuses (civilian + defense), particularly near military bases.

The executive order doesn’t just streamline permitting, it redefines the DNA of future data center development. The traditional model of “find land, get power, get local permits, build” will evolve into a complex federal-state hybrid framework that can feature Federal capital backing, concurrent permitting of compute and power, and strategic siting tied to national security.

Rewriting the Playbook

Overall, these moves can be seen as a re-write of the data center developer playbook, and we should shortly see first movers in the industry start to take advantage of these new guidelines for the government.

While we often see data center investments that include funding for local workforce development, the Plan makes definitive recommendations along these lines, emphasizing Registered Apprenticeships, career and technical education alignment, and upskilling of tradespeople (electricians, HVAC techs, controls engineers) for AI infrastructure.

With the EO defining an accelerated process for the development of these projects, the demand for these skills should continue to grow, bringing benefits to the areas that the new data centers are developed.

In many ways, all of the above begins to become reminiscent of the approach the country took toward manufacturing for World War II.

While not quite the complete restructuring of the American economy to becoming an effective producer of war material, it is clear that the message is that the AI landscape is a battle of sorts.

And so these are the first steps to simplify the process, enabling simpler funding for large scale projects, while speeding up development and deployment of AI focused data centers at scale.

DCC’s Vision Reflected in Federal Action

The federal AI Action Plan and the July 2025 Executive Order on data center permitting mark a high-water moment for the Data Center Coalition (DCC), which has spent the past two years quietly but assertively outlining the operational and regulatory needs of modern AI infrastructure. Many of the policy levers now pulled at the highest levels of government align with specific DCC recommendations, signaling that industry input helped shape what is effectively a national AI-industrial deployment framework.

In a 2024 white paper and subsequent Hill briefings, the DCC urged the federal government to:

• Establish a coordinated permitting framework across federal agencies.
• Recognize large-scale AI data centers and their supporting energy infrastructure as critical national assets.
• Expand categorical exclusions and modernize NEPA compliance.
• Accelerate transmission and generation siting for data center-driven demand.
• Unlock federal land use for digital infrastructure projects.
• Integrate skilled trades and workforce development into long-term planning.

Each of these pillars finds clear analogs in the AI Action Plan’s architecture and the permitting Executive Order. The FAST‑41 expansion, DOE’s grid modernization alignment, and the shift toward federal-state coordination all mirror the DCC’s call for a streamlined, durable foundation to support sustained AI compute growth.

Critically, the Executive Order’s $500M investment threshold and explicit inclusion of energy infrastructure and brownfield redevelopment broaden the aperture well beyond hyperscaler campuses. This is in line with the DCC’s strategy to advocate not just for the Googles and Metas of the world, but for multi-tenant operators, edge deployments, and public-private hybrids that reflect the full diversity of U.S. digital infrastructure players.

Perhaps the most telling signal of industry influence is the White House’s choice of language framing AI data centers as integral to national security and economic competitiveness, an idea long championed by the DCC. The organization has repeatedly asserted that compute infrastructure should be viewed not as a land-use burden but as a strategic enabler of innovation, resilience, and sovereignty.

While the Executive Order remains an initial blueprint subject to implementation risk and political headwinds, the alignment with DCC priorities suggests that the data center industry has finally secured a seat at the federal strategy table.

As new permitting templates and funding channels come online, industry observers will watch closely to see how DCC members and their projects begin to move through the newly created federal fast lanes.

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