White House moves to fast-track permitting for data centers and power the future of artificial intelligence
On July 23, 2025, the White House issued Executive Order No. 14318 aimed at accelerating the buildout of artificial intelligence (AI) data centers and critical power infrastructure needed to support AI data centers. The Order seeks to expedite federal permitting and limit other requirements seen as an obstacle to the rapid, efficient build out and use of AI data centers, transmission lines, and related infrastructure. The Order directs the Commerce Department, with the Office of Science and Technology Policy (OSTP), to make funding available to encourage qualifying projects.
The Order, Accelerating Federal Permitting of Data Center Infrastructure (AI Infrastructure Order), is one of three AI-related executive orders (the other two are Executive Order Nos. 14319 and 14320) issued on the same day as part of the Administration's AI Action Plan to boost the U.S. AI tech sector by allowing it to compete with countries like China by cutting regulations, speeding up data-center construction, and promoting American technology exports. The AI Action Plan and executive orders (collectively discussed in this DWT Insight) present an opportunity for companies and investors to capitalize on potential improved federal regulatory efficiencies in the buildout of AI data centers and energy infrastructure.
Qualifying Projects and Covered Components
The AI Infrastructure Order casts a broad net to streamline and expedite the construction of data centers and infrastructure projects needed to support such data centers, including their substantial energy requirements. The order distinguishes between qualifying AI data center projects that require more than 100 MW of new load dedicated for AI (whether for inference, training, simulation, or synthetic data generation) and other qualifying projects that support AI data centers (i.e., materials, products, or infrastructure that AI data centers rely upon or need). Either project type may qualify for relief and be considered a "Qualifying Project" if the project meets one of three thresholds:
- The project involves at least $500 million in capital expenditures;
- The project protects national security; or
- The project has been designated as a Qualifying Project by the Secretary of Defense, the Secretary of the Interior, the Secretary of Commerce, or the Secretary of Energy.
The AI Infrastructure Order recognizes the importance of the supporting infrastructure required to develop AI data centers, including the transmission system and energy supply. However, the Order and AI Action Plan limit energy resources to dispatchable baseload sources. The Order includes a directive for federal agencies to expedite the construction of transmission lines to bolster data center reliability and transfer capacity. Specifically, the Order seeks to encourage the development of "Covered Components" to support AI data centers. The definition of Covered Components excludes intermittent renewable generation technologies, but includes:
- energy infrastructure, such as transmission lines, natural gas pipelines, natural gas lateral pipelines, substations, switchyards, transformers, switchgear, and system protective facilities;
- natural gas turbines, coal power equipment, nuclear power equipment, geothermal power equipment, and any other dispatchable baseload energy sources, including project-specific electrical infrastructure and backup power supply;
- semiconductors and semiconductor materials, such as wafers, dies, and packaged integrated circuits;
- networking equipment, such as switches and routers; and
- data storage, such as hardware storage systems, software for data management and protection, and integrated services that work with public cloud providers.
Notwithstanding the definition, the build out of transmission and other infrastructure will benefit the development of all sources of energy supply used to support AI data centers, including intermittent resources such as wind and solar.
Expedited Permitting for Qualifying Projects
The AI Infrastructure Order mandates that key federal agencies (DOI, DOE, CEQ, EPA, and Commerce) initiate the process to revise and expedite environmental and construction permitting for AI projects, starting with identifying within 10 days of the Order any existing Categorical Exclusions under the National Environmental Policy Act (NEPA) that may help to facilitate the construction of Qualifying Projects. Implementation of the Order thus may result in Qualifying Projects facing fewer hurdles, benefitting from streamlined reviews under NEPA and other federal environmental laws, and having increased access to federal lands that previously were not readily accessible.
Specifically, the AI Infrastructure Order directs the EPA to develop or modify regulations under the Clean Air Act (CAA), Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), Toxic Substances Control Act (TSCA), and other relevant applicable laws to expedite permitting for Qualifying Projects. The EPA is also directed to identify Brownfield and Superfund sites for use by Qualifying Projects and to develop guidance to help expedite related environmental reviews within 180 days of the AI Infrastructure Order's issuance, opening the door for novel development opportunities to reuse previously contaminated sites.
The AI Infrastructure Order also mandates that the DOI, DOD, and DOE identify suitable sites on federal land for data center construction and associated power generation infrastructure.[1] These departments are then required to promptly initiate consultation under section 7 of the Endangered Species Act (ESA) with respect to common construction activities for Qualifying Projects that will occur over the next 10 years at a programmatic level.
The Order does not address water quantity and sourcing needed to satisfy data centers' considerable water needs. However, the AI Infrastructure Order addresses water quality issues and directs the Secretary of the Army and the Assistant Secretary for Civil Works to reassess existing nationwide permits—issued under Section 404 of the CWA and Section 10 of the Rivers and Harbors Act—within 180 days of the AI Infrastructure Order's issuance to see if tailored permits could better streamline approvals for Qualifying Projects and speed up development and construction.
Additional Expediency, Coordination, and Transparency Under FAST-41
The Order makes reference to the Fixing America's Surface Transportation Act (FAST Act), passed under the Obama administration in 2015. The FAST Act is aimed at streamlining planning, permitting, and construction processes for the country's surface transportation infrastructure. By reducing bureaucratic hurdles, the FAST Act was intended to facilitate more efficient project execution and improve overall infrastructure development across the nation. The AI Infrastructure Order directs the Federal Permitting Improvement Steering Council to designate Qualifying Projects as "transparency projects." This initial designation offers project developers the option to expedite a project's progression into a "covered project" under Title 41 of the FAST Act, streamlining the permitting process and promoting quicker project execution.
Financial Incentives
The AI Infrastructure Order directs Commerce and the Office of Science and Technology Policy to launch an initiative exploring financial support, including but not limited to tax incentives, loans, grants, and offtake agreements for Qualifying Projects. This signals a push by the White House to financially support the growth of AI somewhat akin to the types of incentives offered for production and investment in renewable technologies under the Inflation Reduction Act of 2022 (IRA).
Consistency with the "Big Beautiful Bill"
The Administration's efforts to promote data center development seems somewhat at odds with certain provisions of the One Big Beautiful Bill Act that slashed tax credits for many types of renewable energy technologies on which many data center developers and operators rely to meet their renewable electricity targets. However, the broad directive to develop transmission and other infrastructure support for AI may help facilitate AI data center access to renewable as well as conventional energy resources.
Next Steps
The AI Infrastructure Order signals a significant shift in how the federal government will seek to assist AI infrastructure projects be expeditiously permitted and developed across the nation. While the Order largely must be implemented by designated federal agencies, companies and investors have a unique opportunity to take advantage of potential relaxed regulations for the buildout of AI data centers and related energy infrastructure.
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