Biden’s Executive Order instructs the Departments of Defence (DoD) and Energy (DoE) to select federally-owned sites where private sector firms can build AI data centres and clean power facilities.
The order comes as the US data centre market is ballooning, with Microsoft alone set to invest half of its global $80 billion AI data centre funds on projects in the US.
President-Elect Trump too looks to be courting data centre investments, standing proudly next to Damac’s Hussain Sajwani and SoftBank’s Masayoshi Son as they pledged to spend tens of billions building out AI infrastructure in the US.
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Biden’s closing act order was welcomed by experts from across the AI and infrastructure market, with Andy Cvengros, the US data centre markets co-lead at JLL, told Capacity it’s “incredibly exciting” to see the federal government champion the growth of the sector by opening up previously untapped land opportunities.
“Building a gigawatt-sized data centre campus is incredibly complex and comes with its unique challenges,” Cvengros said. “It has yet to be determined whether the unnamed sites would actually make viable data centre locations as it relates to power, fibre, latency to other locations, and staffing.
“While the order appears to address fast-tracking regulatory reviews and approvals, it is anticipated that there will be significant red tape to navigate as the projects come to the forefront. The top concern in the industry is the development timing of substations and utility line extensions to sites. Hopefully, this effort will help solve that at a broad scale.”
The order doesn’t exclusively focus on data centres, however, with President Biden demanding sites also be used for clean energy infrastructure projects to provide data centres with sources of power beyond local grids while also revitalising the country’s energy infrastructure.
Jeff Le, the VP for global government affairs and public policy at SecurityScoreCard, suggested some projects created through the order may face political resistance from communities impacted by nearby construction.
“Local officials will need to work closely with intergovernmental counterparts, chambers of commerce, and community groups to ensure deeper political rifts that could further delay construction and drain political capital,” he said
Le was formerly the Deputy Cabinet Secretary for the State of California under Governor Jerry Brown. He suggested that some projects stemming from the order may have an impact at the state level.
“From what I have seen in California, the permitting process is very challenging and new facilities and operations must be constructed to handle the massive amount of power,” Le explained. “California, in particular, will feel this strain as they house 35 of the 50 largest AI companies in the world. There may be impacts on the broader grid, so this intergovernmental effort allows for a forum for solutions and energy challenges that AI efforts will make.
“However, more needs to be considered on environmental impacts on water and adjacent communities impacted by wide-scale construction.”
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Lars Nyman, the chief marketing officer at global cloud GPU platform CUDO Compute, said Biden’s order might help the US maintain its lead for now, but suggested it was a “mixed bag” for local communities.
“The rhetoric is all about jobs, clean energy, digital progress, etc. AI data centres guzzle electricity and water like frat boys at a kegger,” Nyman said. “A single hyperscale facility can suck up to 30 million gallons of water a year.
“These projects can bring jobs and tax revenue. But they also bring noise, traffic, and environmental concerns. Also, AI development isn’t exactly a poster child for equitably distributed benefits. Communities will foot the bill for infrastructure but may not see many a penny of the AI gold rush.”
Companies developing AI look set to benefit from President Biden’s order, with the potential to access more compute.
Komninos Chatzipapas, the founder of one such firm, HeraHaven.AI, said the order “will be of great benefit to AI tech development in the US”.
“It appears to be geared towards the biggest companies that need superclusters to train state-of-the-art AI models, like Meta which recently invested $10 billion in a Louisiana data centre,” Chatzipapas said. “The order also has measures to prevent energy prices from rising in the areas around the data centres and minimise any environmental impact.
“I can only think of the positive impacts this will have on the communities around the data centres as there will be a lot of work to be done to get the data centres up, as well as maintain them.”
Biden’s order came hot on the heels of the UK government unveiling an ambitious plan to court AI firms, including increasing the country’s infrastructure capacity twentyfold.
While AI technologies on either side of the Atlantic continue to evolve at pace, Ivo Ivanov, CEO of DE-CIX told Capacity that concerns over the required network infrastructures in place to support and sustain it have gotten louder.
“This move by the Biden administration is, in part, a direct response to those concerns,” Ivanov said. “Edge computing and an increasing number of geographically distributed and interconnected data centres will be needed to do justice to AI’s potential and revolutionise the economy.
“[The US]’s move to develop this ecosystem in a way that is energy-conscious and sustainable will be an important milestone on the road to achieving next-generation, AI-ready connectivity.”
As the US prepares for a new direction under President Trump, Biden’s final bow sets an ambitious stage for AI and clean energy. Whether his successor will continue this vision remains to be seen.
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