New US federal action will drive data center development - Here's what you should know

On July 23, 2025, the Trump Administration published an AI Action Plan [1] titled “Winning the Race: America’s AI Action Plan,” as well as three Executive Orders (EOs) on AI. While the action plan focuses on federal policy goals to accelerate AI innovation, get infrastructure built to support AI, and secure US primacy in international AI diplomacy and security, the EOs offer some of the most immediate implications for stakeholders looking to build and operate new data centers. Most relevant is EO 14318 “Accelerating Federal Permitting of Data Center Infrastructure.” [2]

What does the “Data Center” EO 14318 do?

With this EO, the Trump Administration is seeking to accelerate actions to support “bold, large-scale industrial plans to vault the United States further into the lead on critical manufacturing processes and technologies that are essential to national security, economic prosperity, and scientific leadership,” including the development of AI data centers and related infrastructure. To achieve this goal, the administration promises to ease federal regulations, offer financial support, and make federally owned land and resources more easily available to get data centers built.

Regulations and permitting

Specifically, the EO calls for easing and expediting the environmental review process under the National Environmental Policy Act (NEPA) and streamlining permitting reviews by developing or modifying regulations under the Clean Air Act, Clean Water Act, Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), and Toxic Substances Control Act.

Financial support

To encourage investment in data center projects, the EO directs the federal government through the US Department of Commerce and other relevant agencies to provide loans and loan guarantees, grants, tax incentives, and offtake agreements to financially support “Qualifying Projects,” which are defined as those that involve the construction of data centers and related infrastructure. States with “burdensome AI regulations” may see reduced federal AI funding.

Opening federal lands

To further support new data center projects, the EO directs the Departments of Commerce, Interior, and Energy to coordinate with industry on authorizing sites consistent with applicable federal laws. The Department of Defense is to investigate military installations and competitively lease available lands to support DOD AI objectives.

What about state regulations and permitting?

States still have their own patchwork of water, air, and other environmental regulations and permitting requirements that developers need to navigate to build data centers. These executive actions discourage state-level regulatory restrictions by using a threat to withhold federal AI funds from those states with “burdensome” AI regulations, although the term “burdensome” is undefined at the moment.

As a result, we may see states start to weaken their environmental regulations specifically for the AI industry moving forward, particularly state regulations aligned with the Clean Water Act, the National Environmental Policy Act, and the Endangered Species Act. Additionally, the Federal Trade Commission will review all investigations and consent decrees from the previous administration to ensure they do not “unduly burden AI innovation.”

What this means for data center developers

Considering developing new data centers and related infrastructure? As you navigate the new federal regulatory landscape and competing state-law regulations, carefully consider your development strategy. Direct your legal and policy teams to treat these new federal actions as a baseline plan moving forward under this Administration. But beware that as fewer and weaker federal and state regulations take shape, developers will assume more responsibility for public interaction and the changes that may come when the current federal administration concludes its term.

Conclusion

The federal government is moving quickly and decisively to incentivize the development of data centers and support the AI industry, which reflects its importance to the Trump Administration. With the full weight of the executive branch, expect to see federal regulations, resources, and financial incentives become much more data-center development-friendly in the months and years to come.

However, states still have wide latitude to regulate and permit projects according to their own priorities, and federal pressure to change state regulations could take time, especially if they wind up in court. As you move forward, be sure to understand the landscape of your proposed or selected site(s) - and not just the political, regulatory, and permitting landscape. Regardless of the administration’s priorities, the physical landscape will have a profound impact on your project’s success. So “legacy” concerns around power accessibility and reliability, water quantity and quality, and climate impacts must be taken into account from Day 1.

How SLR can help

SLR is a leading consultancy supporting data center developers and other clients in the US and worldwide. We provide expert analyses and turnkey solutions to the data center challenges of changing regulatory landscapes, energy supply and efficiency, water quality and reliability, climate risk analyses, and more. ​

With each client, SLR works through the full lifecycle of a data center to quickly bring projects from concept to feasibility and planning to delivery.​ Our breadth of expertise and experience enables us to provide strategic advice and value that can unlock investment much more quickly and de-risk decision-making. Specific services include:

• Site selection and feasibility studies
  • Evaluating geographical risks (e.g., seismic, flooding, extreme weather)
  • Assessing grid reliability & energy supply
    
• Sustainability and ESG compliance
  • Implementing energy-efficient cooling & heat recovery solutions
  • Supporting carbon-neutral & renewable-powered data center development
  • Conducting lifecycle emissions & environmental impact assessments (EIA)
    
• Risk, resilience, and uptime optimization
  • Designing for redundancy & disaster recovery planning
  • Optimizing power & water usage efficiency (PUE & WUE)
    
• Planning, permitting, and regulatory compliance
  • Successfully navigating planning & permitting regulations

The digital age is here to stay, and the need for resilient, energy-efficient, and sustainable data centers has never been greater. By taking proactive steps today, data center operators can future-proof their infrastructure while supporting a greener, more connected world.

References

[1] https://www.whitehouse.gov/wp-content/uploads/2025/07/Americas-AI-Action-Plan.pdf

[2] https://public-inspection.federalregister.gov/2025-14212.pdf