In July, a wave of new federal laws and policy proposals that impact AI infrastructure were introduced, including the passage of Congress’s ‘One Big Beautiful Bill’ Act and the White House’s AI Action Plan. These developments come at a time when analysts are bracing for increased economic uncertainty due to tariffs and the race for AI dominance. Despite this backdrop, experts noted significant changes to energy tax credits, hinting at a broader policy stability.
The second Trump administration’s handling of AI infrastructure garnered mixed reactions from leaders in policy, law, technology, and data center construction. While some were cautiously optimistic about the federal government’s role in the industry, concerns were raised about potential hindrances to AI regulation. Questions also arose regarding energy sustainability, the involvement of community stakeholders in new developments, and whether the pace of innovation can keep up with rising energy and computational demands.
One contentious provision in the ‘One Big Beautiful Bill Act’ is the termination of renewable energy tax credits, a move that could escalate energy costs and impede growth, particularly in states heavily reliant on wind and solar power. However, the bill does offer support for research and development (R&D) tax incentives. Tyler Thompson, a partner at Reed Smith, highlighted the potential for increased R&D to lead to more sustainable outcomes, such as grid modernization.
Mark Suski, senior director of business development at Jensen Hughes, emphasized the need to address sustainability challenges beyond wind and solar energy. He suggested streamlining the regulation of small modular reactors (SMRs) and investing in innovative technologies like large battery energy storage systems (BESS) to supplement renewables and meet high energy demands.
The White House’s AI Action Plan was accompanied by a $92 billion investment from companies into AI infrastructure. Lucas Beran, director of product marketing at Accelsius, viewed this investment as a reinforcement of power and cooling infrastructure rather than a policy shift. He highlighted the necessity for new data center construction to accommodate the growth of AI workloads, noting the current record-low vacancy rates in data centers.
Despite the potential benefits of increased government and industry investments, Beran acknowledged the challenges of new data center development, including lengthy planning and construction timelines, power availability constraints, and labor shortages. While these investments are expected to have a positive impact on the industry in the long term, overcoming these constraints will require time and concerted efforts.
While the AI Action Plan aims to streamline permitting processes and upgrade the U.S. electric grid to support AI infrastructure development, challenges lie ahead. Mitch Kominsky, vice president of government affairs at Americans for Responsible Innovation, highlighted potential obstacles in the form of community resistance to new data center developments. The influx of hyperscalers acquiring vast tracts of land in rural areas could strain local resources and infrastructure, prompting pushback from residents unaccustomed to such rapid development.
In conclusion, the evolving landscape of AI infrastructure regulation and development presents a complex blend of opportunities and challenges. As federal laws and policies continue to shape the industry, stakeholders must navigate the delicate balance between innovation, sustainability, community engagement, and regulatory compliance to ensure a resilient and forward-thinking AI infrastructure ecosystem.
Despite the lack of guaranteed job growth, builders can still make a positive impact on local communities by dedicating their efforts and resources.
‘Just As AI Is Inevitable, So Is AI regulation’
Addressing the regulatory landscape from his home in Colorado, Thompson highlighted the significance of comprehensive AI regulation, contrasting it with the deregulatory approach of the Trump administration.
While some controversial AI regulations were omitted from recent bills, the push for uniform regulations remains a priority to prevent hindrances in the development of AI technologies.
Kominsky emphasized the importance of regulatory consistency to facilitate innovation and growth in the AI sector, urging for a collaborative approach between industry stakeholders and policymakers.
Thompson echoed the sentiment, advocating for a balance between pro-business initiatives and necessary regulations to foster a conducive environment for AI advancement.
Playing A Supporting Role
Experts evaluating the administration’s approach to AI infrastructure expressed varying opinions but generally acknowledged the importance of consistent energy policies and regulatory frameworks.
They emphasized the industry’s predominant role in shaping outcomes, with federal interventions playing a supplementary rather than primary role in influencing developments.
Beran underscored the gradual nature of AI’s evolution, advocating for policies that align with long-term technological advancements while safeguarding user interests.
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