How a Second Trump Presidency Could Shape the Data Center Industry

With Donald Trump set to return to the White House in 2025 under Republican control of the Senate and likely the House of Representatives, the data center industry could experience significant changes related to energy regulation, semiconductor imports, and local production of silicon.

Meanwhile, the thirst for data center power is likely to continue unabated, and accelerated adoption of AI and generative AI (GenAI) suggests construction of data centers will increase.

The Associated Builders and Contractors (ABC) hailed the election as a positive harbinger for relaxed regulations across the entire construction industry.

“We anticipate that the incoming administration will have a keen focus on AI and our nation’s ability to be the global leader in the space,” Andy Cvengros, managing director, co-lead of US data center markets for JLL, told Data Center Knowledge.

He said to do that, the industry will need to solve the transmission delivery crisis and continue to increase generation capacity rapidly.

This may include reactivating decommissioned coal and nuclear power plants, as well as commissioning more of them.

“We also anticipate that state and federal governments will become much more active in enabling the utilities to proactively expand substations, procure long lead items and support key submarket expansion through planned developments,” Cvengros said.

Related:Data Center Regulation Trends to Watch in 2025

How are other industry stakeholders and analysts reacting? From security and energy regulations to construction and semiconductors, here’s an overview of what experts think could change for the data center ecosystem in the wake of the incoming Trump administration.

Energy Regulations

Tony Harvey, senior director analyst for IT research firm Gartner, said with the incoming Trump administration, there will be shift in the regulatory outlook for US data centers, with federal oversight on energy consumption and renewable energy use likely to be deprioritized.

He said recent discussions around data center regulations at state and local levels – primarily focusing on power usage and environmental impact – will likely remain the primary regulatory drivers in the near term.

“Federally, however, I anticipate limited action, especially given the new administration’s emphasis on traditional energy sources over renewables,” he said.

With a focus on traditional energy sources, the Trump administration could deprioritize federal renewable energy regulations for data centers (Image: Alamy)

Harvey noted the challenges facing data centers in transitioning to renewable energy, noting the technological limitations, particularly in energy storage.

“Although tech giants like Amazon, Google, and Microsoft are exploring alternative energy sources such as hydrogen and nuclear, data centers still require a reliable power supply that renewables alone cannot yet consistently provide,” he explained.

Related:DOE Report Exposes Critical Impact of AI on Data Center Power Consumption

Without advanced battery storage, fully renewable data centers are likely to be at least a decade away.

Despite the federal government’s likely hands-off approach, Harvey said he believes large corporations might support consistent, global standards – especially since European regulations are far stricter.

“US companies would prefer a unified regulatory framework to avoid navigating a complex patchwork of rules across different regions,” he said.

Still, Europe’s stronger regulatory stance on renewable power might lead some companies to prioritize US-based expansions, where subsidies and fewer regulations make operations more economically feasible.

“Factors like data sovereignty and latency concerns will ensure continued investment in European data centers, even with the regulatory imbalance,” Harvey said.

Power Consumption

John A. Hodges, a lawyer with Washington, DC-based HWG, said federal-level data center energy regulation remains a pressing topic, with significant attention already on the matter, according to Hodges.

“If you look at the Washington Post, you’ll see data center energy usage has been on the front page repeatedly,” he said, underscoring the visibility and concern around this issue.

Related:Malaysia’s Data Center Bet: New Planning Guidelines Set to Drive Growth

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According to Hodges, while federal action on regulating data center power consumption may be uncertain, the topic “is certainly very heavily on the minds” of state and federal regulators alike.

“Even if the federal government decides to do nothing further,” he adds, “the states are certainly going to be looking at it, and that seems to be where most of the action is taking place.”

He indicated state-level initiatives would likely continue to drive regulatory efforts in the immediate future, especially around power supply concerns and energy usage transparency.

Data Center Construction

Cvengros pointed to macro-driving factors in site selection for data centers.

These include core markets where availability zones are established, tax incentives, power availability, proximity to power and generation capacity.

“I see states and local governments working to develop planned data center districts where power deployment is pre planned at a park level, where zoning is focused on hyperscale and AI developments, where fiber meets the bandwidth needs and where future expansion is needed to support multi-GW requirements,” he said.

From his perspective, having an administration that supports this and incentivizes it is key.

Cvengros added that the need for more data center construction will evolve in an exponential manner as AI applications become more advanced.

With AI being in the early stages, we anticipate significant future growth as inference models become more advanced, AI starts writing its own code, and queries start to look more at video development.

“Massive data centers will be needed to support this advancement,” he said. “The time in which we get there will be directly correlated to our ability to bringing new capacity online.” 

Security

John Bambenek, president of Bambenek Consulting, said he thinks the overall major change for data centers will be based on the spirit of economic protectionism, specifically, that there will be a greater desire to keep US data inside the US.

“If global tariffs are on the table, the reliance of foreign data centers will become more problematic which will create something of a ‘mini boom’ for US data center operators,” he said.

As custodians of sensitive information, Bambenek said data centers are prime targets for cyber-attacks.

“It’s simply easier to steal all the secrets going in and out of data centers than trying to compromise each individual service,” he explained. “If this happening to [large telcos], you can bet it is happening to data centers too.”

That means hardening network devices and making sure administrative interfaces are not accessible via the Internet is imperative.  

Semiconductors

Vlad Galabov, head of the cloud and data center research practice at Omdia, said he believes incentives for American manufacturing are likely under a new Trump administration.

“I think the regulators so far have underestimated how broad the overall supply chain for any computing device is,” he explained.

He added processors are not the only component that needs to be produced.

For example, the printed circuit boards (PCBs) chips get soldered or clipped onto are largely produced in Asia and imported into the US.

“So far I have not seen significant focus on changing this,” he said. “The materials needed to make PCBs will also need to be imported as it stands today.”

From his perspective, the rumored import tariffs are likely to raise the cost to produce and assemble computing and storage devices for the data center industry.