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Turning of the Tides: An Analysis of Recent U.S. Presidential Support for Data Centers and Digital Infrastructure

The COVID-19 pandemic catalyzed an unprecedented surge in digital transformation, forcing businesses, educational institutions, and healthcare providers to rapidly adapt to a world where virtually everything had to be online. Suddenly, an industry that used to be invisible now found itself prominently in the spotlight. When data centers were deemed “essential infrastructure” during the COVID […]

The COVID-19 pandemic catalyzed an unprecedented surge in digital transformation, forcing businesses, educational institutions, and healthcare providers to rapidly adapt to a world where virtually everything had to be online. Suddenly, an industry that used to be invisible now found itself prominently in the spotlight.

When data centers were deemed “essential infrastructure” during the COVID shutdowns under the first Trump administration, many of us felt a small amount of pride for having been remembered but also felt the gravity of the situation. The stakes were high, and our infrastructure was being put to its toughest test ever: reliable uptime for all of society must be maintained.

This seismic shift to remote work and virtual interactions placed immense pressure on data center infrastructure, pushing it to the forefront of global attention. As social distancing measures took effect, data centers became the backbone supporting increased internet traffic, offering collaborative software for businesses, schools, healthcare institutions, digital retailers, and more, all the while maintaining data security. Let’s not leave out the impact to entertainment resources such as online gaming or forget the day we thought Netflix would actually break the internet.1

The impact of the pandemic on digital infrastructure2 is worth noting a few celebratory statistics:

1.        Education: With 1.2 billion children out of classrooms, e-learning platforms saw massive growth as Google Classroom and Zoom calls took the place of traditional educational methods.

2.        Healthcare: Telemedicine usage exploded as in-person doctor appointments became restricted, with some providers reporting increases of up to 158% in app usage.

3.        Business: Companies needed to accelerate their digital transformation efforts as well as support remote employees, compressing years of strategic goals into mere months.

4.        Entertainment: Online gaming surged, with Xbox Live reaching a record 90 million monthly active users during quarantine.

The dramatic spike in the utilization of server compute, storage, and network resources, brought about a sudden and intense reliance on digital infrastructure to maintain societal functions during a global crisis. The industry’s ability to scale rapidly and meet the exponential growth in demand demonstrated our incredible preparation and resilience as we continued to support the digital world, and this could not remain unnoticed by society.

Connecting the Unconnected

As a fallout to the pandemic, eyes were opened to the plight of underserved markets. Before the pandemic, only 72% of rural residents had moderate- or high-speed broadband available in their census blocks, compared to over 90% of the general U.S. population.3

In rural areas, children were left behind in completing educational requirements, struggling due to a lack of internet access. The digital divide became glaringly apparent, with rural districts significantly less likely to expect teachers to provide instruction, take attendance, or monitor student progress compared to their urban counterparts.4

The Biden-Harris administration recognized the need to build digital infrastructure, taking necessary steps to address this issue through the Broadband Equity, Access, and Deployment (BEAD) program, a cornerstone of their “Internet for All” initiative. The BEAD program, authorized by President Biden’s Bipartisan Infrastructure Law, allocated $42.45 billion for high-speed internet infrastructure deployment to deploy or upgrade broadband networks. This historic investment aimed to ensure that everyone in America had access to affordable, reliable high-speed internet service. States were enabled to administer the grant program within their borders using the allocated funds, and substantial funding to this endeavor occurred: New Mexico received over $675 million, Virginia over $1.4 billion4, and New Jersey over $263 million5 in BEAD funds.

Funding Is Not the Same As Deployment

The BEAD program, while ambitious in its goals, has faced criticism for its perceived lack of progress. However, there are several important considerations that explain the challenges in turning funding into actual broadband deployment.

1.        The BEAD program primarily focuses on “last-mile” fiber deployments, which connect end-users to the broader network. However, this approach overlooks a crucial component: middle-mile infrastructure has to come first. You can’t build the last mile until the middle mile has also been put into place, as it provides the necessary connection to the broader network. This incomplete foundation would have rendered the last-mile deployments isolated and ineffective, much like building new power generation without transmission lines to distribute the electricity. A later solution from the Biden-Harris administration recognized this challenge and in 2023, announced $930 million to further build middle-mile connectivity.6

2.        Grants available had limited coverage, typically meeting no more than 50% of each awarded deployment.7 The high cost of fiber deployment is prohibitive, with the average cost reaching $27,000 per mile, potentially much higher in challenging terrain.8 Companies awarded grants would therefore still need to secure substantial additional funding to complete their projects. Finding these investors is a challenge because, unlike data centers, fiber deployments offer no tangible assets to reclaim in case of default, making it a high-risk investment for potential backers.

3.        Even with funding secured, fiber deployment faces challenges with right-of-way issues. Obtaining easements and right-of-way access across miles of residential and local communities can face significant pushback. Moreover, the distance required for rural areas is made more complex (and less profitable) due to low population density, vast distances between premises, and varying topography. When all that is said and done, there’s always the process and timeline for obtaining permits.

While the BEAD program has allocated significant funding, the path from funding to actual deployment is fraught with challenges that must be addressed to achieve the goal for expanding access and Internet for All. But kudos to the Administration for recognizing the need and putting a program in place to lend their support and advocate for digital connectivity.

AI Entered the Scene at Full Throttle

There is no other way to look at it: the introduction of generative AI completely rewrote the rules.

The advent of generative AI in late 2022 and early 2023 dramatically accelerated the need for robust digital infrastructure and comprehensive regulatory frameworks. With this large of a technological and societal shift in such a short period of time, regulatory bodies were bound to act swiftly to determine how their jurisdictions would adopt and respond.

President Biden’s administration acknowledged the rapidly evolving landscape with a series of initiatives aimed at both harnessing AI’s potential and mitigating its risks.

March 2024: OMB AI Governance Policy9

AI became a portion of the federal budget, which jointly recognized society’s apprehension, but also the capabilities of the technology. The Office of Management and Budget (OMB) released a 34-page memo detailing AI governance policies for federal agencies. Key aspects included:

·        Establishing guardrails for AI uses that could impact Americans’ rights or safety

·        Expanding agency requirements for AI use case inventories

·        Mandating the designation of Chief AI Officers (CAIOs) in federal agencies

Summer 2024: National AI Talent Surge10

The administration announced plans to hire at least 100 AI professionals into government positions by summer 2024.

October 2024: National Security Memorandum on AI11

President Biden issued the first-ever national security memorandum on artificial intelligence, building upon the comprehensive approach to AI governance established in his executive order. This memo:

·        Directed U.S. government agencies to implement AI technologies for national security missions, aiming to maintain the country’s competitive edge.

·        Formally chartered the AI Safety Institute within the Department of Commerce, designating it as the primary point of contact for U.S. industry on AI matters.

·        Called for strengthening chip supply chains and securing AI inventions, recognizing the need to protect U.S. technological advantages.

·        Provided guidance on AI governance and risk management in national security contexts, including prohibitions on certain AI uses such as unlawfully suppressing free speech or removing human oversight in critical nuclear weapons decisions.

·        Emphasized the importance of shaping international norms around AI use to reflect democratic values.

Ongoing Initiatives

·        The administration has been working on international consensus-building around AI, including G7 documents and UN resolutions.

·        OMB plans to take action on federal procurement of AI later in the year.

·        The government is continuously updating its approach to address novel legal and ethical issues as they arise in AI development and deployment.

These initiatives collectively demonstrate the Biden administration’s commitment to establishing a comprehensive regulatory framework for AI while simultaneously promoting its responsible adoption across government agencies. The focus has been on balancing innovation with safety, security, and ethical considerations, positioning the United States as a leader in AI governance on the global stage.

2025 Launched Bipartisan Announcements in the Pre-Inauguration Term

Biden’s Final AI Initiative12

President Biden’s final major AI initiative before leaving office was a strategic executive order addressing the rapidly growing energy needs of advanced AI data centers. Signed on January 14, 2025, the order directs the Department of Defense and Department of Energy to identify at least three federal sites for private sector AI data center development for hosting gigawatt-scale, new clean power facilities. The administration’s projections indicate that leading AI developers will require data centers with up to five gigawatts of capacity for training AI models by 2028, exacerbating the critical infrastructure challenges facing the technology sector.

At first glance, by emphasizing support of the development of AI infrastructure within the United States, the executive order aims to maintain national technological leadership while addressing potential national security concerns. Likewise, an order mandating that companies utilizing federal lands for AI data centers purchase American-made semiconductors and integrate clean energy sources, embraces values of both the “Buy American” as well as climate conscious persuasions, reflecting a balanced approach to supporting domestic technological innovation.

However, this move raises complex questions about the relationship between government and private tech companies. While the initiative aims to bolster U.S. leadership in AI and address critical infrastructure needs, it also presents potential concerns, potentially raising security concerns about sensitive data and technologies being developed on government property. The mandate for clean energy use in these facilities demonstrates the administration’s commitment to environmental goals, but it also raises questions about the extent of government influence over private sector operations. Perhaps the best solution to many data center constraints is found by respecting the delicate balance between fostering innovation, maintaining national security, pursuing clean energy objectives, while also permitting valuable government real estate to be leveraged for economic gain.

Nevertheless, the initiative reinforces the government’s efforts toward a sophisticated attempt to balance economic competitiveness, AI safety, and strategic infrastructure development, positioning the United States at the forefront of the global AI transformation.

President-Elect Trump’s First Data Center Initiatives13: DAMAC and Stargate

DAMAC’s U.S. Data Center Surge

President-elect Donald Trump’s announcement of a $20 billion investment in U.S. data centers by DAMAC Properties, an Emirati company led by billionaire Hussain Sajwani, marks another significant development in the tech infrastructure landscape. This investment, revealed on January 7, 2025, is positioned as a testament to Trump’s ability to attract substantial foreign capital for large-scale projects in the United States.

Sajwani, a long-time business associate of the Trump family, cited the recent election as a key motivator for this commitment, which aligns with the growing demand for data center capacity driven by advancements in artificial intelligence, cryptocurrency, and the broader digital economy. DAMAC has stated that the Edgnex expansion plan will focus on sunbelt states, specifically Texas, Arizona, Oklahoma, and Louisiana, and midwest states, such as Ohio, Illinois, Michigan, and Indiana; their plans are to build data centers with a capacity of 2000MW over the next four years.14  Notably, United Arab Emirates (UAE) power sources lean heavily on natural gas and solar power; we may expect to see DAMAC’s Edgnex implement the same here.

“Covid has been a major factor in bringing about a world of change. It has meant a faster move for everyone towards digital economies. When everything gets done on the phone, there is a need to increase the data space,” said Sajwani.14

This foreign investment in the US is worthy of some analysis. With the post-pandemic acceleration of demand for data center infrastructure, it is no surprise that commercial real estate developers and investors the world around are seeking to diversify and amplify their interests. Saudi and Emirati investments in U.S. data center infrastructure represent a significant shift in strategy for Middle Eastern investors, reflecting the growing importance of data as a commodity in the global economy. Nabeel Mahmood, a futurist and financial expert, offers valuable insights into this trend.

Mahmood points out that Middle Eastern countries, having long relied on oil and gas revenues, are now diversifying their investments to maintain their quality of life. They recognize data as the “commodity of the future,” an endless resource unlike finite fossil fuels. This shift is evident in their investment portfolios, which have expanded from traditional sectors like sports, utilities, and real estate to include digital infrastructure.

Noting that initial investments in tech companies like Apple have yielded significant dividends, this has encouraged further investment in the data sector. Mahmood predicts that over the next 2-3 years, Middle Eastern investors will become some of the largest influencers in digital infrastructure growth and investment. He adds:

“Over the next presidential term, we could see one of the largest capital infusions into digital infrastructure, with Middle Eastern investors potentially making 40% of total investments. This influx is expected to be distributed across four key categories: 5G networks, cloud computing, data centers, and artificial intelligence. The projected allocation over the next four years suggests approximately 20% for 5G network infrastructure, 30-35% for cloud computing, 30% for AI technologies, with the remainder split between data centers and physical layer infrastructure.”

From a physical infrastructure perspective, data centers align well with traditional Middle Eastern investment strategies that value land as a primary asset. Unlike the dot-com burst, Mahmood believes the current tech investment landscape is more stable. The infrastructure is now in place, and there’s widespread acceptance of connectivity and reliance on technology. This validation from a consumption perspective mitigates some of the risks associated with these investments.

As major tech firms expand their presence in the Middle East’s data center and cloud computing space, we can expect to see a reciprocal increase in Middle Eastern investments in U.S. digital infrastructure, reflecting the global nature of the digital economy.

Lingering Debates on Foreign Investment Will Impact the Digital Economy

With his earlier announcement in mind, foreign investment is poised to significantly impact the digital economy as the Trump administration begins its second term. However, President-elect Trump’s “America First” approach has been frequently highlighted during both his campaigns and is expected to reshape policies on foreign ownership of U.S. assets. While the January 2025 announcement seems to have his full blessing, there are nevertheless implications to foreign investment extending beyond traditional sectors and into to the rapidly growing digital infrastructure.

Both recent administrations’ focus on protecting U.S. technological development, especially in artificial intelligence and semiconductor industries, is quite likely to result in increased scrutiny of foreign investments in these areas over the long term. This aligns with the broader trend of strengthening national security measures, including potential reforms to the Committee on Foreign Investment in the United States (CFIUS) and the implementation of stricter outbound investment controls.

Concerns about foreign ownership extend to natural resources, as exemplified by the ongoing debate over foreign purchase of farmland and water rights. In Arizona, for instance, tensions have arisen due to foreign companies acquiring land and water resources for agricultural purposes, raising questions about resource depletion and export.15 This issue highlights the broader concern about foreign control over critical U.S. resources and commodities.

As data increasingly becomes recognized as a valuable commodity, it’s likely that the Trump administration, or possibly subsequent administrations, will extend protectionist policies to the digital realm. This could lead to federally mandated limits on foreign ownership or control of U.S. digital infrastructure, similar to the caps being considered for land acquisition. Such measures would aim to safeguard national interests and prevent excessive foreign influence over critical digital assets.

Foreign ownership of data centers raises other questions on data sovereignty and regulations like GDPR, which have significant implications for global data management and cross-border data flows. While the principle that data should be subject to the laws of its country of origin is gaining traction, there’s a growing need for a more globalized approach to data governance because of this foreign investment. The challenge lies in establishing a unified regulatory framework that respects individual nations’ sovereignty while facilitating necessary data transfers for global business operations to create standardized rules and oversight mechanisms that can balance national interests with the needs of a globally connected digital economy.

The evolving landscape suggests that foreign investors, particularly from countries like Saudi Arabia, may need to adapt their strategies, potentially opting for minority stakes in U.S. ventures to navigate these new restrictions. As the digital economy continues to grow, the balance between attracting foreign investment and protecting national interests will remain a critical challenge for policymakers.

The Stargate Project

Fast-forward to this week, on Jan. 21 OpenAI unveiled an ambitious initiative called the Stargate Project, a groundbreaking $500 billion investment in artificial intelligence (AI) data centers aimed at solidifying the United States’ position as a global leader in AI innovation. This monumental project, supported by key partnerships with SoftBank, Oracle, MGX, Arm, Microsoft, and NVIDIA, is set to redefine the landscape of AI infrastructure while delivering profound economic and strategic benefits.

The Stargate Project, a joint venture spearheaded by OpenAI and SoftBank, will deploy its initial $100 billion immediately, with the remaining $400 billion planned over the next four years. SoftBank, led by Chairman Masayoshi Son, will provide financial leadership, while OpenAI will oversee operations. This unparalleled investment underscores the project’s mission to bolster America’s AI capabilities, generate hundreds of thousands of jobs, and drive economic revitalization. OpenAI’s CEO Sam Altman described Stargate as “the most important project of this era.”

Infrastructure and Economic Impact

The Stargate Project has already commenced its infrastructure buildout in Texas, with Oracle’s site in Abilene serving as a key initial hub. The facility, apparently leased from Crusoe, is reportedly constructing 10 data centers on-site, with additional campuses being evaluated nationwide. These data centers, designed exclusively for OpenAI’s operations, will support the rapid expansion of its generative AI compute portfolio and enable the training of cutting-edge models to advance artificial general intelligence (AGI).

This project promises to inject significant momentum into the digital infrastructure ecosystem. OpenAI has expressed its intention to collaborate with firms across all facets of data center development, including land acquisition, power generation, construction, and equipment manufacturing. “We want to connect with firms across the built data center infrastructure landscape, from power and land to construction to equipment, and everything in between,” the company stated.

Strategic Partnerships

Stargate’s success hinges on its collaboration with some of the tech industry’s most prominent players. Arm, Microsoft, NVIDIA, Oracle, and OpenAI are among the key technology partners driving this initiative.

The project builds on a long-standing partnership between OpenAI and NVIDIA, which began in 2016, and an evolving collaboration with Oracle to build and operate the project’s AI computing systems. Microsoft’s Azure cloud platform will also play a pivotal role, with OpenAI continuing to expand its usage of Azure to support its ambitious computational requirements.

National Security and Global Leadership

Beyond its technological aspirations, the Stargate Project has significant geopolitical implications. By advancing American leadership in AI, Stargate aims to provide strategic capabilities to safeguard national security and maintain an edge over global competitors such as China.

The project’s scale and urgency have drawn support from policymakers, including President Trump, who emphasized the importance of keeping AI innovation within the U.S. “We’re making it possible for them to get this production done easily, at their own plants if they want,” he stated during a White House press conference announcing the initiative.

OpenAI’s vision for Stargate extends beyond economic and strategic objectives. The organization’s commitment to AGI development remains rooted in the belief that AI can elevate humanity. “This step is critical on the path to figuring out how to use AI to benefit all of humanity,” OpenAI affirmed.

Looking Ahead

While specific technical details about Stargate’s planned facilities remain under wraps, past proposals from OpenAI suggest the potential for massive 5 GW data centers—facilities that would rank among the largest in the world. As the Stargate Project advances, its impact on the data center industry, AI research, and global technology leadership will undoubtedly be profound.

In an era where AI is reshaping economies and societies, the Stargate Project stands as a testament to the transformative potential of bold investments and visionary collaboration. For stakeholders across the digital infrastructure landscape, Stargate represents not only an opportunity to participate in a historic undertaking but also a chance to shape the future of AI and its role in serving humanity.

Implications of U.S. Presidential Support for Data Centers to Our Industry

Investment

The data center industry continues to experiencing unprecedented growth and investment, with projections indicating a phenomenal expansion in 2025 and beyond. JLL’s 2025 Global Data Center Outlook forecasts a baseline 15% CAGR for the global data center market through 2027, with potential to reach 20%.

President-elect Trump’s announcement of a $20 billion investment by DAMAC Properties is significant, as is President Biden’s DOD and DOE land reuse for AI data centers, it’s important to contextualize these within the broader industry landscape. Blackstone estimates a total of $1 trillion in domestic investment over the next five years.16 These commitments are substantial, marquee moments in our industry, certainly. But in light of broader investment, they risk being seen as relatively insignificant in the grand scheme of data center investments, representing a small fraction of the anticipated need. From an operator’s perspective, $20 billion isn’t much more than seed money, and six sites close to transmission lines makes barely a ripple in the infrastructure need to support AI. We will need much more support to truly move the needle (cue: The Stargate Project).

While government support and advocacy for data center investments are generally positive, it’s crucial to maintain an objective perspective on the actual impact of individual announcements. It highlights the fact that many politicians truly do not understand how much is being invested in digital infrastructure every year and that even larger game-changing investment is needed to support the rapidly evolving and accelerating developments. Let’s acknowledge that we’ve communicated the essential services we offer, but not our financial scale; we need to communicate our value by both standards.

Not In My Back Yard

NIMBYism has become an increasingly significant challenge for the data center industry as its visibility and impact on local communities grow. The rapid expansion of data centers, driven by the insatiable demand for digital services and AI, has led to a surge in community opposition.

With more awareness from the pandemic and AI applications comes heightened scrutiny. Data center developers can no longer rely on the industry’s previous relative anonymity. The early “wild west” approach to construction and operation is naturally untenable as communities raise concerns about resource consumption, environmental impact, and changes to local landscapes.

To address these challenges, data center operators must prioritize community engagement and transparency. This includes implementing strategic public engagement plans early in the project lifecycle, clearly defining project benefits, and proactively addressing community concerns. Additionally, the industry should expect and prepare for mandated assessments and certifications to demonstrate compliance with environmental and community standards.

As the data center boom continues, companies must adapt their approach to site selection and development, considering not just technical requirements but also community impact and sustainability. This shift towards being a “good neighbor” will be crucial for the industry’s continued growth and acceptance in local communities.

Sustainability and Regulation

It’s high time for data center operators to face the music: the industry’s days of operating in relative obscurity are over. With increased visibility comes heightened responsibility, and the spotlight is now squarely on our power and water consumption. We can no longer afford to treat sustainability as a mere checkbox or PR exercise.

The reality is stark: our industry’s energy appetite is voracious and growing. As AI and cloud services explode, so does our power demand. We’re no longer just a blip on the grid—in many markets, we’re becoming a major strain. Water usage, particularly in cooling systems, is another Achilles’ heel that’s drawing increasing scrutiny.

The Biden administration’s focus on clean power for data centers is just the beginning. We should more stringent regulations on energy efficiency, water conservation, and overall environmental impact. This isn’t just about appeasing environmentalists or ticking regulatory boxes. It’s about securing our industry’s future.

Communities are pushing back, utilities are struggling to keep up, and regulators are sharpening their pencils. If we don’t proactively address these concerns, we risk facing operational constraints, increased costs, and potential roadblocks to expansion. It’s on us to get ahead of the curve, innovating and implementing truly sustainable solutions before they’re mandated.

This is our wake-up call. It’s time to stop treating sustainability as an afterthought and start baking it into every aspect of our operations. The data center operators who thrive in this new era will be those who embrace this challenge head-on, turning sustainability into a competitive advantage.

Charting New Waters

The data center industry stands at a pivotal moment of unprecedented growth and recognition. From massive investments to government acknowledgment of our critical infrastructure, we are witnessing a transformative period that validates the essential nature of our services. The convergence of artificial intelligence, cloud computing, and digital transformation has positioned data centers as the backbone of modern technological progress.

Our industry has moved from the shadows of corporate infrastructure to the forefront of global economic and technological innovation. The investments we’re seeing – from private ventures to government-backed initiatives – reflect a broader understanding that data centers are no longer just support systems, but fundamental drivers of economic and technological advancement.

During his first term, President Trump prioritized American leadership in cutting-edge technologies, including artificial intelligence, quantum information science, and 5G communications.17 Trump’s return to the White House promises a robust commitment to digital infrastructure and technological advancement. His administration’s approach is characterized by pro-business policies and a focus on American technological leadership, and we should expect to see further unprecedented support for the data center and digital technology sectors. Let us look to this incoming administration with hope for policies that accelerate infrastructure development, reduce regulatory barriers, and position the United States at the forefront of global digital innovation.

As we look forward, the opportunities are boundless. The recognition of our industry’s critical role, the increasing investments, and the growing demand for computational power all signal a future of continued growth and significance. We should approach this moment with optimism, strategic vision, and a commitment to continuing our role as the not-so-silent enablers of the digital revolution.

References:

1.        https://www.nasdaq.com/articles/will-netflix-break-the-internet-2020-03-21

2.        https://a2globalelectronics.com/electronics-news-trends/supply-chain-management-in-the-wake-of-a-pandemic/3-reasons-why-data-center-demand-is-booming-right-now/

3.        https://files.eric.ed.gov/fulltext/ED628332.pdf

4.        https://www.internetforall.gov/news-media/biden-harris-administration-approves-new-mexico-and-virginias-internet-all-initial

5.        https://www.internetforall.gov/news-media/biden-harris-administration-approves-new-jerseys-internet-all-initial-proposal

6.        https://broadbandusa.ntia.gov/news/latest-news/biden-harris-administration-announces-930-million-expand-and-strengthen-americas

7.        https://www.alixpartners.com/insights/102j5i1/the-5-uncomfortable-truths-of-the-broadband-equity-access-and-deployment-progra/

8.        https://info.aldensys.com/joint-use/3-challenges-of-fiber-deployment-and-how-to-improve-the-process

9.        https://fedscoop.com/white-house-unveils-ai-governance-policy/

10.   https://ai.gov/wp-content/uploads/2024/04/AI-Talent-Surge-Progress-Report.pdf

11.   https://therecord.media/biden-administration-artificial-intelligence-nsm

12.   https://www.reuters.com/technology/artificial-intelligence/biden-issue-executive-order-ensure-power-ai-data-centers-2025-01-14/

13.   https://apnews.com/article/trump-damac-emirates-investment-data-centers-00aa7c2189ba631eede4d232797a296f

14.   https://gulfnews.com/business/markets/damacs-hussain-sajwani-is-all-set-for-his-next-big-business-push—data-centers-1.1647496803137

15.   https://apnews.com/article/climate-uae-alfalfa-water-arizona-drought-d911d5219c8f41dc44d65fb2af6b04df

16.   https://www.datacenterfrontier.com/hyperscale/article/55131851/in-ai-arms-race-data-centers-are-the-table-stakes-for-hyperscale-players

17.   https://trumpwhitehouse.archives.gov/issues/infrastructure-technology/

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North America Drops Rigs Again WoW

North America dropped two rigs week on week, according to Baker Hughes’ latest North America rotary rig count, which was released on February 14. Although the U.S. added two rigs week on week, Canada dropped four rigs during the same period, taking the total North America rig count down to 833, comprising 588 rigs from the U.S. and 245 rigs from Canada, the count outlined. Of the total U.S. rig count of 588, 572 rigs are categorized as land rigs, 14 are categorized as offshore rigs, and two are categorized as inland water rigs. The total U.S. rig count is made up of 481 oil rigs, 101 gas rigs, and six miscellaneous rigs, according to the count, which revealed that the U.S. total comprises 524 horizontal rigs, 51 directional rigs, and 13 vertical rigs. Week on week, the U.S. land rig count increased by two, and the country’s offshore and inland water rig counts remained unchanged, the count highlighted. The U.S. oil and gas rig counts each increased by one week on week, and the country’s miscellaneous rig count remained unchanged during the same timeframe, the count showed. Baker Hughes’ count revealed that the U.S. horizontal and directional rig counts each increased by one week on week, while the country’s vertical rig count remained unchanged during the period. A major state variances subcategory included in the rig count showed that, week on week, Texas added two rigs, and Oklahoma and Utah each added one rig. Louisiana and North Dakota each dropped one rig week on week, according to the count. A major basin variances subcategory included in Baker Hughes’ rig count showed that the Granite Wash and Permian basins each added one rig and the Williston basin dropped one rig, week on week. Canada’s total rig count of 245 is

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Energy Transfer to Provide Gas to AI Data Center in Texas

Energy Transfer LP has entered into a long-term agreement to provide natural gas to CloudBurst Data Centers, Inc.’s flagship AI-focused data center development in Central Texas. Energy Transfer subsidiary Oasis Pipeline, LP will provide up to 450,000 million British thermal units (MMBtu) per day of firm natural gas supply to CloudBurst’s Next-Gen Data Center campus outside of San Marcos, Texas, subject to CloudBurst reaching a final investment decision (FID) with its customer. The natural gas supply would be sufficient to generate up to approximately 1.2 gigawatts of direct, or “behind-the-meter” electric power for a period of at least 10 years starting with phase 1 of the data center facilities, Energy Transfer said in a news release. Denver-based CloudBurst expects to reach FID later in the year and anticipates the facility to be operational in the third quarter of 2026. The agreement represents Energy Transfer’s first commercial arrangement to supply natural gas directly to a data center, it said. Energy Transfer remarked that it is” uniquely positioned to provide reliable natural gas supply that is crucial to the data center operations under development,” many of which are near its network of more than 105,000 miles of natural gas gathering, and intrastate and interstate transportation pipelines and storage facilities with a combined storage capacity of nearly 236 billion cubic feet. Energy Transfer further said it is in discussions with a number of data center developers and expects this to be the “first of many agreements” to supply, store and transport natural gas to fuel data centers, electric generation facilities and other power-demand customers. “We are very excited about our close relationship with Energy Transfer and feel extremely confident in their ability to provide redundancy through their vast pipeline network and storage capacity. In addition, we will work closely with Energy Transfer to

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Global Underwater Hub and Scottish Enterprise forge floating wind partnership

The Global Underwater Hub (GUH) and Scottish Enterprise (SE) have forged a partnership aimed at transforming the UK’s subsea supply chain into a global centre of excellence for floating offshore wind. Signed on the opening day of Subsea Expo 2025, the groups signed a memorandum of understanding aimed at maximising the economic value presented by floating wind’s projected global growth. It will also support the transition of the UK’s oil and gas underwater sector supply chain into floating offshore wind. Working together, the GUH and SE will identify and bring together the companies, organisations, facilities, resources and expertise that can support the growth of the floating offshore wind industry in the UK and internationally. In addition, they will identify gaps in the UK’s underwater supply chain capability, infrastructure, resources and expertise, relative to the needs of the floating offshore wind market, with an aim to providing targeted support to fill those gaps. Focus areas include subsea cable systems, moorings and anchoring as well as underwater operations and maintenance. GUH chief executive Neil Gordon said: “The growth of floating offshore wind brings massive opportunities for our underwater supply chain. ScotWind alone represents £28 billion in development, manufacturing, and installation opportunities to bring 30GW of generating capacity online over the next decade and a further £33b from operations and maintenance over the full life of a windfarm. “With extensive experience, skills and technology, honed over five decades in offshore energy, our supply chain is perfectly positioned to meet the challenges and complexity of floating offshore wind.” Scottish Enterprise director for energy transition Suzanne Sosna added: “Our vision is for Scotland to be viewed around the world as a centre of excellence for offshore wind, with supply chains that are world-leading in terms of value, competitiveness, and service. “Collaborative working is essential to

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Petrobras Unlocks New Production in Buzios Oilfield

Petróleo Brasileiro SA (Petrobras) and its partners have started production at the Búzios7 project, expected to raise production in the Búzios oilfield offshore Brazil to as much as one million barrels per day (bpd) by the second half of 2025. “Shortly, it is anticipated that Búzios will become Petrobras’ largest production field, with the goal of reaching 2 million barrels per day by 2030”, Petrobras said in an online statement Monday announcing the start-up of Búzios7. Concurrently Petrobras announced a new discovery in the western part of the field. Well 9-BUZ-99D-RJS, drilled to a water depth of 1,940 meters (6,364.83 feet), is a new accumulation in a zone below the main reservoir. The well is 189 kilometers (117.44 miles) off the coast of Rio de Janeiro, according to Petrobras. “Tests conducted from a depth of 5,600 meters confirmed the presence of oil reservoirs through electrical profiles, which will later be characterized through laboratory analyses”, it said in a separate press release. “The discovery reaffirms the pre-salt potential of the Búzios field”. The sixth project started up in the field, Búzios7 has a floating production, storage and offloading (FPSO) vessel and a subsea production system. “The FPSO used in Buzios7 project is one of the largest FPSOs in the world, with a processing capacity higher than the industry average”, co-venturer CNOOC Ltd. said separately. FPSO Almirante Tamandaré, leased from SBM Offshore, can produce up to 225,000 bpd, process 12 million cubic meters (423.78 million cubic feet) a day of natural gas and store 1.4 million barrels of crude. It is equipped with closed flare to minimize greenhouse gas emissions and heat recovery devices to reduce energy consumption, according to the partners. Búzios7 will have 15 development wells including seven for production. Six wells will double up for water access and gas

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Data center spending to top $1 trillion by 2029 as AI transforms infrastructure

His projections account for recent advances in AI and data center efficiency, he says. For example, the open-source AI model from Chinese company DeepSeek seems to have shown that an LLM can produce very high-quality results at a very low cost with some clever architectural changes to how the models work. These improvements are likely to be quickly replicated by other AI companies. “A lot of these companies are trying to push out more efficient models,” says Fung. “There’s a lot of effort to reduce costs and to make it more efficient.” In addition, hyperscalers are designing and building their own chips, optimized for their AI workloads. Just the accelerator market alone is projected to reach $392 billion by 2029, Dell’Oro predicts. By that time, custom accelerators will outpace commercially available accelerators such as GPUs. The deployment of dedicated AI servers also has an impact on networking, power and cooling. As a result, spending on data center physical infrastructure (DCPI) will also increase, though at a more moderate pace, growing by 14% annually to $61 billion in 2029.  “DCPI deployments are a prerequisite to support AI workloads,” says Tam Dell’Oro, founder of Dell’Oro Group, in the report. The research firm raised its outlook in this area due to the fact that actual 2024 results exceeded its expectations, and demand is spreading from tier one to tier two cloud service providers. In addition, governments and tier one telecom operators are getting involved in data center expansion, making it a long-term trend.

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The Future of Property Values and Power in Virginia’s Loudoun County and ‘Data Center Alley’

Loudoun County’s FY 2026 Proposed Budget Is Released This week, Virginia’s Loudoun County released its FY 2026 Proposed Budget. The document notes how data centers are a major driver of revenue growth in Loudoun County, contributing significantly to both personal and real property tax revenues. As noted above, data centers generate almost 50% of Loudoun County property tax revenues. Importantly, Loudoun County has now implemented measures such as a Revenue Stabilization Fund (RSF) to manage the risks associated with this revenue dependency. The FY 2026 budget reflects the strong growth in data center-related revenue, allowing for tax rate reductions while still funding critical services and infrastructure projects. But the county is mindful of the potential volatility in data center revenue and is planning for long-term fiscal sustainability. The FY 2026 Proposed Budget notes how Loudoun County’s revenue from personal property taxes, particularly from data centers, has grown significantly. From FY 2013 to FY 2026, revenue from this source has increased from $60 million to over $800 million. Additionally, the county said its FY 2026 Proposed Budget benefits from $150 million in new revenue from the personal property tax portfolio, with $133 million generated specifically from computer equipment (primarily data centers). The county said data centers have also significantly impacted the real property tax portfolio. In Tax Year (TY) 2025, 73% of the county’s commercial portfolio is composed of data centers. The county said its overall commercial portfolio experienced a 50% increase in value between TY 2024 and TY 2025, largely driven by the appreciation of data center properties. RSF Meets Positive Economic Outlook The Loudoun County Board of Supervisors created the aformentioned Revenue Stabilization Fund (RSF) to manage the risks associated with the county’s reliance on data center-related revenue. The RSF targets 10% of data center-related real and personal property tax

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Deep Diving on DeepSeek: AI Disruption and the Future of Liquid Cooling

We know that the data center industry is currently undergoing a period of rapid transformation, driven by the increasing demands of artificial intelligence (AI) workloads and evolving cooling technologies. And it appears that the recent emergence of DeepSeek, a Chinese AI startup, alongside supply chain issues for NVIDIA’s next-generation GB200 AI chips, may be prompting data center operators to reconsider their cooling strategies. Angela Taylor, Chief of Staff at LiquidStack, provided insights to Data Center Frontier on these developments, outlining potential shifts in the industry and the future of liquid cooling adoption. DeepSeek’s Market Entry and Supply Chain Disruptions Taylor told DCF, “DeepSeek’s entry into the market, combined with NVIDIA’s GB200 supply chain delays, is giving data center operators a lot to think about.” At issue here is how DeepSeek’s R1 chatbot came out of the box positioned an energy-efficient AI model that reportedly requires significantly less power than many of its competitors. This development raises questions about whether current data center cooling infrastructures are adequate, particularly as AI workloads become more specialized and diverse. At the same time, NVIDIA’s highly anticipated GB200 NVL72 AI servers, designed to handle next-generation AI workloads, are reportedly facing supply chain bottlenecks. Advanced design requirements, particularly for high-bandwidth memory (HBM) and power-efficient cooling systems, have delayed shipments, with peak availability now expected between Q2 and Q3 of 2025.  This combination of a new AI player and delayed hardware supply has created uncertainty, compelling data center operators to reconsider their near-term cooling infrastructure investments. A Temporary Slowdown in AI Data Center Retrofits? Taylor also observed, “We may see a short-term slowdown in AI data center retrofits as operators assess whether air cooling can now meet their needs.” The efficiency of DeepSeek’s AI models suggests that some AI workloads may require less power and generate less heat, making air

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Georgia Follows Ohio’s Lead in Moving Energy Costs to Data Centers

The rule also mandates that any new contracts between Georgia Power and large-load customers exceeding 100 MW be submitted to the PSC for review. This provision ensures regulatory oversight and transparency in agreements that could significantly impact the state’s power grid and ratepayers. Commissioner Lauren “Bubba” McDonald points out that this is one of a number of actions that the PSC is planning to protect ratepayers, and that the PSC’s 2025 Integrated Resource Plan will further address data center power usage. Keeping Ahead of Anticipated Energy Demand This regulatory change reflects Georgia’s proactive approach to managing the increasing energy demands associated with the state’s growing data center industry, aiming to balance economic development with the interests of all electricity consumers. Georgia Power has been trying very hard to develop generation capacity to meet it’s expected usage pattern, but the demand is increasing at an incredible rate. In their projection for increased energy demand, the 2022 number was 400 MW by 2030. A year later, in their 2023 Integrated Resource Plan, the anticipated increase had grown to 6600 MW by 2030. Georgia Power recently brought online two new nuclear reactors at the Vogtle Electric Generating Plant, significantly increasing its nuclear generation capacity giving the four unit power generation station a capacity of over 4.5 GW. This development has contributed to a shift in Georgia’s energy mix, with clean energy sources surpassing fossil fuels for the first time. But despite the commitment to nuclear power, the company is also in the process of developing three new power plants at the Yates Steam Generating Plant. According to the AJC newspaper, regulators had approved the construction of fossil fuel power, approving natural gas and oil-fired power plants. Designed as “peaker” plants to come online at times of increased the demand, the power plants will

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Chevron, GE Vernova, Engine No.1 Join Race to Co-Locate Natural Gas Plants for U.S. Data Centers

Other Recent Natural Gas Developments for Data Centers As of February 2025, the data center industry has seen a host of significant developments in natural gas plant technologies and strategic partnerships aimed at meeting the escalating energy demands driven by AI and cloud computing. In addition to the partnership between Chevron, Engine No. 1, and GE Vernova, other consequential initiatives include the following: ExxonMobil’s Entry into the Electricity Market ExxonMobil has announced plans to build natural gas-fired power plants to supply electricity to AI data centers. The company intends to leverage carbon capture and storage technology to minimize emissions, positioning its natural gas solutions as competitive alternatives to nuclear power. This announcement in particular seemed to herald a notable shift in industry as fossil fuel companies venture into the electricity market to meet the rising demand for low-carbon power. Powerconnex Inc.’s Natural Gas Plant in Ohio An Ohio data center in New Albany, developed by Powerconnex Inc., plans to construct a natural gas-fired power plant on-site to meet its electricity needs amidst the AI industry’s increasing energy demands. The New Albany Energy Center is expected to generate up to 120 megawatts (MW) of electricity, with construction beginning in Q4 2025 and operations commencing by Q1 2026. Crusoe and Kalina Distributed Power Partnership in Alberta, Canada AI data center developer Crusoe has entered into a multi-year framework agreement with Kalina Distributed Power to develop multiple co-located AI data centers powered by natural gas power plants in Alberta, Canada. Crusoe will own and operate the data centers, purchasing power from three Kalina-owned 170 MW gas-fired power plants through 15-year Power Purchase Agreements (PPAs). Entergy’s Natural Gas Power Plants for Data Centers Entergy plans to deploy three new natural gas power plants, providing over 2,200 MW of energy over 15 years, pending approval

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Podcast: Phill Lawson-Shanks, Chief Innovation Officer, Aligned Data Centers

In the latest episode of the Data Center Frontier Show podcast, DCF Editor-in-Chief Matt Vincent sits down with Phill Lawson-Shanks, Chief Innovation Officer at Aligned Data Centers, for a wide-ranging discussion that touches on some of the most pressing trends and challenges shaping the future of the data center industry. From the role of nuclear energy and natural gas in addressing the sector’s growing power demands, to the rapid expansion of Aligned’s operations in Latin America (LATAM), in the course of the podcast Lawson-Shanks provides deep insight into where the industry is headed. Scaling Sustainability: Tracking Embodied Carbon and Scope 3 Emissions A key focus of the conversation is sustainability, where Aligned continues to push boundaries in carbon tracking and energy efficiency. Lawson-Shanks highlights the company’s commitment to monitoring embodied carbon—an effort that began four years ago and has since positioned Aligned as an industry leader. “We co-authored and helped found the Climate Accord with iMasons—taking sustainability to a whole new level,” he notes, emphasizing how Aligned is now extending its carbon traceability standards to ODATA’s facilities in LATAM. By implementing lifecycle assessments (LCAs) and tracking Scope 3 emissions, Aligned aims to provide clients with a detailed breakdown of their environmental impact. “The North American market is still behind in lifecycle assessments and environmental product declarations. Where gaps exist, we look for adjacencies and highlight them—helping move the industry forward,” Lawson-Shanks explains. The Nuclear Moment: A Game-Changer for Data Center Power One of the most compelling segments of the discussion revolves around the growing interest in nuclear energy—particularly small modular reactors (SMRs) and microreactors—as a viable long-term power solution for data centers. Lawson-Shanks describes the recent industry buzz surrounding Oklo’s announcement of a 12-gigawatt deployment with Switch as a significant milestone, calling the move “inevitable.” “There are dozens of nuclear

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Microsoft will invest $80B in AI data centers in fiscal 2025

And Microsoft isn’t the only one that is ramping up its investments into AI-enabled data centers. Rival cloud service providers are all investing in either upgrading or opening new data centers to capture a larger chunk of business from developers and users of large language models (LLMs).  In a report published in October 2024, Bloomberg Intelligence estimated that demand for generative AI would push Microsoft, AWS, Google, Oracle, Meta, and Apple would between them devote $200 billion to capex in 2025, up from $110 billion in 2023. Microsoft is one of the biggest spenders, followed closely by Google and AWS, Bloomberg Intelligence said. Its estimate of Microsoft’s capital spending on AI, at $62.4 billion for calendar 2025, is lower than Smith’s claim that the company will invest $80 billion in the fiscal year to June 30, 2025. Both figures, though, are way higher than Microsoft’s 2020 capital expenditure of “just” $17.6 billion. The majority of the increased spending is tied to cloud services and the expansion of AI infrastructure needed to provide compute capacity for OpenAI workloads. Separately, last October Amazon CEO Andy Jassy said his company planned total capex spend of $75 billion in 2024 and even more in 2025, with much of it going to AWS, its cloud computing division.

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John Deere unveils more autonomous farm machines to address skill labor shortage

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More Self-driving tractors might be the path to self-driving cars. John Deere has revealed a new line of autonomous machines and tech across agriculture, construction and commercial landscaping. The Moline, Illinois-based John Deere has been in business for 187 years, yet it’s been a regular as a non-tech company showing off technology at the big tech trade show in Las Vegas and is back at CES 2025 with more autonomous tractors and other vehicles. This is not something we usually cover, but John Deere has a lot of data that is interesting in the big picture of tech. The message from the company is that there aren’t enough skilled farm laborers to do the work that its customers need. It’s been a challenge for most of the last two decades, said Jahmy Hindman, CTO at John Deere, in a briefing. Much of the tech will come this fall and after that. He noted that the average farmer in the U.S. is over 58 and works 12 to 18 hours a day to grow food for us. And he said the American Farm Bureau Federation estimates there are roughly 2.4 million farm jobs that need to be filled annually; and the agricultural work force continues to shrink. (This is my hint to the anti-immigration crowd). John Deere’s autonomous 9RX Tractor. Farmers can oversee it using an app. While each of these industries experiences their own set of challenges, a commonality across all is skilled labor availability. In construction, about 80% percent of contractors struggle to find skilled labor. And in commercial landscaping, 86% of landscaping business owners can’t find labor to fill open positions, he said. “They have to figure out how to do

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2025 playbook for enterprise AI success, from agents to evals

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More 2025 is poised to be a pivotal year for enterprise AI. The past year has seen rapid innovation, and this year will see the same. This has made it more critical than ever to revisit your AI strategy to stay competitive and create value for your customers. From scaling AI agents to optimizing costs, here are the five critical areas enterprises should prioritize for their AI strategy this year. 1. Agents: the next generation of automation AI agents are no longer theoretical. In 2025, they’re indispensable tools for enterprises looking to streamline operations and enhance customer interactions. Unlike traditional software, agents powered by large language models (LLMs) can make nuanced decisions, navigate complex multi-step tasks, and integrate seamlessly with tools and APIs. At the start of 2024, agents were not ready for prime time, making frustrating mistakes like hallucinating URLs. They started getting better as frontier large language models themselves improved. “Let me put it this way,” said Sam Witteveen, cofounder of Red Dragon, a company that develops agents for companies, and that recently reviewed the 48 agents it built last year. “Interestingly, the ones that we built at the start of the year, a lot of those worked way better at the end of the year just because the models got better.” Witteveen shared this in the video podcast we filmed to discuss these five big trends in detail. Models are getting better and hallucinating less, and they’re also being trained to do agentic tasks. Another feature that the model providers are researching is a way to use the LLM as a judge, and as models get cheaper (something we’ll cover below), companies can use three or more models to

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OpenAI’s red teaming innovations define new essentials for security leaders in the AI era

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More OpenAI has taken a more aggressive approach to red teaming than its AI competitors, demonstrating its security teams’ advanced capabilities in two areas: multi-step reinforcement and external red teaming. OpenAI recently released two papers that set a new competitive standard for improving the quality, reliability and safety of AI models in these two techniques and more. The first paper, “OpenAI’s Approach to External Red Teaming for AI Models and Systems,” reports that specialized teams outside the company have proven effective in uncovering vulnerabilities that might otherwise have made it into a released model because in-house testing techniques may have missed them. In the second paper, “Diverse and Effective Red Teaming with Auto-Generated Rewards and Multi-Step Reinforcement Learning,” OpenAI introduces an automated framework that relies on iterative reinforcement learning to generate a broad spectrum of novel, wide-ranging attacks. Going all-in on red teaming pays practical, competitive dividends It’s encouraging to see competitive intensity in red teaming growing among AI companies. When Anthropic released its AI red team guidelines in June of last year, it joined AI providers including Google, Microsoft, Nvidia, OpenAI, and even the U.S.’s National Institute of Standards and Technology (NIST), which all had released red teaming frameworks. Investing heavily in red teaming yields tangible benefits for security leaders in any organization. OpenAI’s paper on external red teaming provides a detailed analysis of how the company strives to create specialized external teams that include cybersecurity and subject matter experts. The goal is to see if knowledgeable external teams can defeat models’ security perimeters and find gaps in their security, biases and controls that prompt-based testing couldn’t find. What makes OpenAI’s recent papers noteworthy is how well they define using human-in-the-middle

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