On January 14, 2025, President Joe Biden signed an Executive Order titled Advancing United States Leadership in Artificial Intelligence Infrastructure (“AI Executive Order”). The AI Executive Order instructs the Departments of Defense (“DOD”) and Energy (“DOE”), in coordination with other federal agencies, to lease federal sites to private-sector entities for constructing large-scale artificial intelligence (“AI”) data centers and associated clean energy facilities. This directive aims to expedite the development of large-scale AI infrastructure within the United States, emphasizing sustainable energy practices and national security considerations. 

The key provisions of the AI Executive Order and the implications for stakeholders in the energy and technology sectors include:

1. Leasing Federal Land for AI Data Centers: The DOD and DOE are directed to select at least three federal sites each by February 28, 2025, for potential lease to private companies to construct large-scale AI data centers and clean energy facilities by the end of 2027. The DOD and DOE will select sites based on accessibility to high-capacity transmission infrastructure and the ability to minimize adverse effects on communities, the natural environment, and commercial resources.
2. Private Sector Investment and Renewable Energy Alignment: Private companies will finance the construction and operation of AI infrastructure, ensuring no additional costs are imposed on taxpayers. Developers are required to match AI facilities’ energy consumption with clean energy sources, including geothermal, solar, wind, and nuclear energy.
3. Streamlined Permitting Processes: Federal agencies are directed to expedite the permitting process for AI infrastructure projects, including facilitating interconnections to the electric grid. This may involve creating “categorical exclusions” under the National Environmental Policy Act to accelerate development timelines.
4. Use of American-Made Semiconductors: Companies building on federal land are mandated to utilize an appropriate share of American-made semiconductors, with specific procurement requirements determined on a case-by-case basis. This requirement aims to bolster domestic manufacturing and increase investment in US semiconductor chip production.

Impact on Business

The requirement for clean energy integration presents significant opportunities for collaboration between technology companies and clean energy developers. Clean energy projects tied to AI infrastructure development are likely to receive federal support under the AI Executive Order, promoting industry growth. The extent to which the incoming Administration will modify the terms of the AI Executive Order remains to be seen.

Key Takeaways and Considerations

1. Evolving Government-Private Sector Technology and Energy Paradigm: The nexus between cutting-edge AI technology and energy policy continues to tighten as reflected in the AI Executive Order. The development of a robust and secure AI ecosystem in the US is a national security priority, and the country’s energy infrastructure must be refitted in support of that mission. The AI Executive Order suggests ongoing government-private sector collaboration to align AI power demand, develop new generation resources, and streamline federal permitting.
2. New Compliance Frameworks: Federal land leasing and the simplified permitting process for AI infrastructure open new avenues for development at reduced costs, but stakeholders must remain vigilant about evolving environmental and procurement compliance requirements. Companies must ensure alignment with clean energy mandates and US semiconductor sourcing requirements. Accordingly, interested entities should monitor subsequent federal guidance, particularly concerning environmental considerations.
3. Environmental Impact: While clean energy use is mandated, the AI Executive Order does not explicitly address concerns like water consumption for cooling AI data centers, which could become a focus of future regulatory scrutiny.
4. Political Uncertainty: With an impending presidential administration change, the future of the AI Executive Order is uncertain. Interested parties should be prepared for potential modifications or rescissions under new leadership.

Contact Us

Our team is closely monitoring the implementation of the AI Executive Order and is available to advise on the legal and regulatory implications for your business. For more information, please reach out to the co-authors of this alert to learn more about Dentons’ AI and Energy teams.