Federal Action to Fuel Data Center Boom

On July 23, 2025, President Donald Trump signed three Executive Orders¹ aiming to push data centers’ development in the United States. This move marks a significant shift in policy as it introduces a comprehensive framework to streamline regulatory processes and facilitate rapid deployment of essential artificial intelligence (“AI”) infrastructure.

By adopting the Executive Order “On Accelerating Federal Permitting of Data Center Infrastructure” (“Accelerating Federal Permitting EO”), the Trump Administration has announced a significant policy shift aimed at strengthening American manufacturing and technological leadership. Central to this initiative is the implementation of comprehensive industrial strategies designed to advance the United States’ position in key emerging technologies, with a particular emphasis on AI data centers and the necessary supporting infrastructure.

Accelerating Federal Permitting EO rescinds Executive Order 14141, issued on January 14, 2025, which had established extensive diversity, equity, inclusion and climate-related requirements for the development of AI data centers on Federal lands during the Biden Administration. By revoking this order, the new directive removes these additional regulatory obligations from AI data center projects on Federal property.

At the heart of the Accelerating Federal Permitting EO is a set of definitions that establish the scope of eligible projects. “Data Center Projects” are defined as facilities requiring more than 100 megawatts of new electrical load, specifically for AI inference, training, simulation, or synthetic data generation. Accelerating Federal Permitting EO also introduces the concept of “Covered Components”, which includes the full range of materials and infrastructure necessary for these data centers, such as energy transmission lines, power-generation equipment, semiconductors, networking hardware, and data storage systems.

Financial Support for “Qualifying Projects”

Notably, the Secretary of Commerce, in coordination with the Director of the Office of Science and Technology Policy and other federal agencies, is instructed to initiate a program to offer financial support, such as loans, loan guarantees, grants, tax incentives, and offtake agreements, for “Qualifying Projects”.² Agencies are also required to identify and report any existing financial support mechanisms that could assist these projects, ensuring alignment with national security considerations.

Accelerating Environmental Reviews

Another central feature of the Accelerating Federal Permitting EO is the comprehensive reform of relevant environmental and permitting reviews. Federal agencies are now required to identify and expand categorical exclusions under the National Environmental Policy Act (“NEPA”) that could help to streamline the approval and construction of Qualifying Projects. The Council on Environmental Quality is required to work with relevant agencies to also create new categorical exclusions for actions related to Qualifying Projects that typically do not significantly impact the human environment. This might allow many Qualifying Projects to bypass lengthy environmental assessments. 

Importantly, federal financial assistance such as loans, loan guarantees, grants, tax incentives, or similar support, will not be treated as a “major Federal action” under NEPA if the agency does not have significant control or responsibility over how the funds are used. If the federal contribution is less than 50% of the total project cost, it will be presumed that the agency does not have substantial control or responsibility.

Furthermore, the Administrator of the Environmental Protection Agency (“EPA”) is directed to support the expedited permitting of Qualifying Projects on both Federal and non-Federal lands. This will be accomplished by developing or amending regulations under key environmental statutes, including the Clean Air Act, Clean Water Act, Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Toxic Substances Control Act, and any other relevant laws that affect the development of such projects.

Enhancing Transparency and Streamlining Reviews Through FAST-41

The Executive Director of the Federal Permitting Improvement Steering Council (“FPISC”) has the authority to designate certain projects as “transparency projects” within 30 days after a relevant agency identifies them to FPISC in accordance with FAST-41 and related statutes. Once designated, these projects can be published on the Permitting Dashboard, which includes their schedules for expedited federal review. The Executive Director, working with Project Sponsors, is tasked with moving eligible transparency projects to full “covered project” status under FAST-41 as quickly as possible. If a project does not meet the standard criteria for covered projects, FPISC may explore alternative pathways to grant covered status, ensuring that more projects can benefit from the streamlined permitting process.

Utilizing Federal Lands, Brownfields and Superfund Sites for Data Center Growth

The Trump Administration also announced its plans to leverage federally owned land and resources to support the swift and structured development of data centers. This initiative will ensure that any use of federal lands for such purposes remains consistent with their designated functions. In particular, the Accelerating Federal Permitting EO instructs the Department of the Interior, the Department of Energy, and the Department of Defense to permit the construction of data centers on suitable federal lands. Moreover, it encourages the development of data centers on Brownfield and Superfund sites, supporting the productive reuse of these properties.

Conclusion

The Accelerating Federal Permitting EO represents a concerted effort to position the United States as a leader in AI infrastructure by removing regulatory obstacles, expediting permitting, and making federal resources available for large-scale data center development. Stakeholders in the AI and data center sectors are encouraged to stay informed about forthcoming agency guidance, and to engage early with relevant authorities to take full advantage of these new opportunities.

¹ Executive Order Accelerating Federal Permitting of Data Center Infrastructure, Executive Order Preventing Woke AI in the Federal Government, and Executive Order Promoting The Export of the American AI Technology Stack.

² “Qualifying Project” is defined as a Data Center Project or Covered Component Project that meets at least one of the following criteria: (i) the project sponsor commits at least $500 million in capital expenditures, as determined by the Secretary of Commerce; (ii) the project involves an incremental electric load addition of more than 100 MW; (iii) the project is designed to protect national security; or (iv) the project is specifically designated as a “Qualifying Project” by the Secretary of Defense, the Secretary of the Interior, the Secretary of Commerce, or the Secretary of Energy.