Biden Drafting Plan for Construction of AI Data Centers on Federal Land

(The Washington Post) -- The Biden administration is drafting a plan to allow construction of massive data centers and electrical power plants on federally owned lands, responding to worries that the US could fall behind other nations in the race to dominate AI, according to people involved with the deliberations.

The White House is racing to write the plan as an executive order that Biden would sign before his term ends January 20, according to industry and government officials working on the effort, who spoke on the condition of anonymity because they are not authorized to discuss it publicly.

The plan taking shape would relax environmental restrictions on select parcels of federal land, which have yet to be identified, the people said. They said the focus is on next-generation data centers that consume at least one gigawatt of electricity, roughly the amount used by a city of 1 million residents.

The plan would likely allow construction of dedicated power plants fueled by natural gas at the same sites, with wind or solar power expected to eventually take the place of natural gas, the sources said.

The White House declined to discuss the initiative.

“This administration is continuing to work with all stakeholders to ensure the US leads the world in AI, and AI data centers are powered by clean energy without raising electricity costs for consumers,” said an email from White House spokesperson Robyn Patterson. Outlines of the discussions were first reported by E&E News.

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The effort underscores the administration’s frustration with energy shortages and supply chain logjams that tech executives say threaten to constrain the AI industry’s growth. The plan would allow AI companies such as OpenAI, Microsoft, and Google to build new power plants that would feed electricity to data centers independently from regional power grids – which are unable to keep up with the enormous demands.

The tech companies that could take advantage of the executive action are represented in White House conversations by a trade group, the Data Center Coalition, which declined to comment.

Those involved cautioned that the administration has yet to share any draft text for the action, and it is possible the White House won’t finish the work before Biden’s term ends next month.

National security officials are warning the US AI industry risks falling behind rivals like China that are able to more quickly build the vast new electricity infrastructure needed to feed data center growth, a point emphasized in a 273-page congressional report on AI development released this week. The report also raises worries about the economic consequences of ceding AI development to other countries.

Related:Canada Invests $240M to Advance AI Data Center Capacity

A coalition of major environmental groups is aggressively lobbying against targeting federal land for the development of data centers. They warned in a letter that such a move by the Biden administration “could not only diminish, but deeply undermine, its historically significant climate achievements.”

On Tuesday, five Democratic senators wrote to the White House, urging Biden to reconsider any executive order fast-tracking data center development, warning of the consequences for the environment.

Air pollution attributable to the use of electricity by data centers is rapidly growing, becoming a significant climate and public health threat, according to new research from Morgan Stanley and scholars at Caltech and the University of California at Riverside.

Permitting developers to build dedicated power plants alongside data centers would allow companies to sidestep regional power grids, which are already overtaxed and do not have enough power to spare for massive new data centers. The plan would establish fast-track timelines for federal agencies to complete any needed environmental studies, they said.

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The executive order being drafted aims to build on earlier actions by the administration to shore up production of computing facilities. Biden signed the Chips Act in 2022, one of the largest industrial development programs in US history, to spur the construction of more than a half-dozen big semiconductor manufacturing facilities that the administration viewed as essential to national security. Legislation the president signed this year eases environmental rules for manufacturing semiconductors and related components.

The Biden plan to spur data center construction has surprised technology executives, who had already shifted their focus to lobbying the incoming Trump administration. Tech company officials involved said they were encouraged by the movement toward an executive order, but declined to talk on the record amid concerns that aligning with the lame duck White House could sour the ties they are working to build with President-elect Donald Trump.

Trump is expected to pursue similar measures upon taking office. The president-elect has vowed to ease the bottlenecks constraining electricity production.

The amount of power consumed by US data centers has grown by 50 percent since last year, and it is expected to grow that much again by the end of 2025, according to figures shared by the Center for Strategic and International Studies. Data centers are expected to consume as much as 17 percent of all US electricity by 2030 - more than quadruple what they consume now.

“We are in a global race to lead in this transformative new technology,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University. “The US has a big headstart. But maintaining that lead requires massive investment in data centers, which consume an enormous amount of power. We have to meet the need for new power generation in the US, and it has to happen quickly.”

There are currently more than 3,000 data centers in the US, according to industry data. The administration action would focus on the biggest of them, known as hyperscalers, where the training models for AI are housed.

The White House initially considered invoking the Defense Production Act in an executive order. That would have put the full force of the federal government behind efforts to bolster and speed up the supply chains for delivering components necessary to build data centers and power plants. But administration officials decided to shelve that idea at an interagency meeting early this week, according to people involved in the discussions.

Tech firms have been aggressively lobbying the administration for more federal support. They pressed the issue at a White House meeting with Biden in September, according to industry executives. At that meeting and in the weeks that followed, artificial intelligence pioneer OpenAI pitched its vision of energy-intense development clusters where nuclear and other types of power plants would fuel data centers that consume as much as five gigawatts of energy, according to a copy of the pitch shared by the company. It has pushed publicly for the easing of rules under the National Environmental Policy Act that restrict development.

OpenAI declined to comment on a potential executive order.

The white paper the company has shared with the regulators and lawmakers warns that while the US is currently the world’s AI innovation leader, “China, fixated on seizing the lead by 2030, is building faster - harnessing government-controlled data and increasing its production of chips and energy. Energy above all is critical to the US maintaining its lead.”

Some advocates are worried that teeing up an executive order to be carried out by the Trump administration could shift the focus from production of clean power to fuel data centers to unfettered access to fossil fuels for power plants.

“I would be concerned about any White House this late in its term taking action that is going to be implemented by a different administration of a different party,” said Josh Freed, senior vice president for climate and energy at Third Way, a center-left think tank that advocates stepped up energy production for AI. “If an executive order leaves any room for interpretation, it is going to be interpreted differently than intended.”