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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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WTI Slips Below $73 as Canada-Mexico Tariff Uncertainty Grows

Oil fell after President Donald Trump’s pick for commerce secretary suggested tariffs on Canada and Mexico aren’t a done deal. West Texas Intermediate slid 1.6% to settle below $73 a barrel after Howard Lutnick said that the US’s two biggest trading partners can avoid new levies if they take action on illegal migration and fentanyl flows. Expectations that the tariffs will go into effect this weekend had earlier spurred a rally in oil futures and briefly pushed the discount for Canadian crude to the widest in six months, before narrowing after Lutnick’s remarks. “Crude prices keep dancing to the rhythm of Trump’s tariff orchestra, with Canada tariffs in focus as they go into effect on Saturday,” said Ole Hansen, head of commodities strategy at Saxo Bank. Wednesday’s price decline represents “a sour sentiment across an overall rangebound market,” he added. Crude started 2025 higher as US sanctions against Russia lifted prices, but trade-war concerns and poor economic data from China have largely erased the year’s gains. The rollout of Trump’s policy agenda has the potential to roil markets further, with the US president calling on OPEC+ to help lower crude prices. The producer cartel is set to discuss Trump’s plans to increase US oil production at its next meeting on Feb. 3, Tass reported, citing Kazakhstan’s Energy Minister Almassadam Satkaliyev. Traders also digested a more hawkish-than-anticipated decision by the Federal Reserve to hold rates steady, dimming the outlook for oil demand. Oil Prices: WTI for March delivery decreased 1.6% to settle at $72.62 a barrel in New York. Brent for March settlement dipped 1.2% to settle at $76.58 a barrel. What do you think? We’d love to hear from you, join the conversation on the Rigzone Energy Network. The Rigzone Energy Network is a new social experience created for you

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Trump Freeze Targets Biden’s Green Bank, EV Tax Credits And More

A $400 billion green bank for clean energy projects and a popular consumer tax credit for electric vehicles are among items being targeted for review under a government-wide spending freeze ordered by the Trump administration. The initiatives are listed in a 52-page document from the White House Office of Management and Budget, seen by Bloomberg News, that details hundreds of programs whose funding is being scrutinized by the White House after it directed the government to temporarily pause spending. The Office of Management and Budget issued the sweeping directive Monday as part of the new president’s aim to overhaul the federal government to align it with the incoming administration’s priorities, which have included halting foreign aid, promoting liquefied natural gas exports and shuttering diversity programs. A federal judge in Washington on Tuesday evening temporarily halted the administration from enforcing the directive. The list includes the Energy Department’s Loan Programs Office, which swelled to $400 billion in financing power under President Joe Biden and his signature climate law, the Inflation Reduction Act. The lending program has nearly $47 billion in conditional commitments to companies in addition to $60.6 billion in loans and loan guarantees that have been granted, including to California utility PG&E Corp. and biofuel maker Calumet Inc.  Also being eyed is a program known as the Advanced Research Projects Agency- Energy, or ARPA-E that has spent billions funding projects meant to achieve technological breakthroughs.  An Energy Department spokesman confirmed Tuesday the agency is conducting a department-wide review of spending “to ensure all activities are consistent with President Trump’s executive orders and priorities.”   A slew of tax credits administered by the Treasury Department also made the list, including a $7,500 credit for the purchase of electric vehicles that has been targeted by Trump. But tax breaks for nuclear power as well as subsidies

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Charging Forward: Northern Ireland pumped hydro plans, Centrica’s Rough uncertainty and the latest battery storage updates

In this week’s Charging Forward, Mutual Energy is progressing plans for a pumped storage hydro scheme in Northern Ireland, Chris Stark flags investment support for UK hydrogen storage and the latest battery storage updates. This week’s headlines: Northern Ireland pumped hydro storage plans Rough uncertainty as Stark backs hydrogen storage UK sees slowdown in BESS as Irish market grows Innova approved for 1 GW Yorkshire BESS Elgin buys Amberside Energy project pipeline RES approval for 45 MW Scottish BESS Ridge Clean Energy progresses Scottish wind and storage project West Midlands battery hub secures £23m boost International news: World’s largest grid battery catches fire in California and UAE launches massive baseload solar and storage project Northern Ireland pumped hydro plans Belfast-headquartered gas and transmission operator Mutual Energy is leading a feasibility study into a pumped storage hydropower scheme in Northern Ireland. Located near Belfast Lough, the Higher Ground NI project would be the first pumped hydro scheme in Northern Ireland. Costing an estimated £1 billion, the plan involves pumping seawater from Belfast Lough to a new reservoir near Carrickfergus using a 4km tunnel. Mutual Energy chief executive Paddy Larkin told the Irish News the project could store close to 3 GWh of excess renewable energy capacity. If it goes ahead, the project would be one of the largest energy infrastructure projects in Northern Ireland for more than 50 years. Most pumped storage hydro project use freshwater reserves, with several schemes currently in development in Scotland close to Loch Ness. However, according to Mutual Energy a freshwater scheme is unlikely to be feasible in Northern Ireland due to the remote location of suitable sites. There are also challenges relating to poor grid infrastructure in the region, and using seawater will allow the firm to locate the project closer to Greater Belfast. Japan developed the

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Trump funding freeze leaves IIJA, IRA projects in limbo

Last week, President Donald Trump told federal agencies to stop disbursing Infrastructure Investment and Jobs Act and Inflation Reduction Act funding, including money that Congress already authorized. The move has thrown climate and infrastructure projects at various stages of development into uncertainty, as his agenda regarding federal government contracts and grants continues to rapidly evolve. Trump’s Jan. 20 “Unleashing American Energy” order to pause and review funding processes has “significant implications for the implementation of the IIJA and IRA,” according to Washington, D.C.-based law firm Crowell, and may lead to project delays, terminations and broader economic uncertainty.  Its precise implications may not be fully understood for months, “and this uncertainty alone is likely to disrupt infrastructure projects and give rise to claims,” according to an alert Crowell partners shared with clients Monday.  “Whether the pause is temporary or becomes permanent, this action potentially could halt billions of dollars in obligated funding for infrastructure projects that already are underway, including those already under construction,” according to Crowell. Another major announcement this week around funding has led to more confusion. A Monday internal memo from the Office of Management and Budget ordered a pause on all federal grants and loans, starting at 5 p.m. Tuesday. Federal agencies must temporarily halt funding and agency activities that may be implicated by the executive orders, “including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” according to the memo. A federal judge on Tuesday temporarily blocked the effort, CBS News reported. U.S. District Judge Loren L. AliKhan’s stay is in effect until Feb. 3 while she considers arguments from the U.S. government and the plaintiffs in the case, a nonprofit coalition that includes the National Council of Nonprofits and the American Public Health Association. There

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Verizon brings AI suite to enterprise infrastructure customers

Verizon Business has launched AI Connect, an integrated suite of products designed to let businesses deploy generative artificial intelligence (AI) workloads at scale. Verizon is building its AI ecosystem by repurposing its existing infrastructure assets in its intelligent and programmable network, which consists of fiber, edge networking, and data center assets, along with its metro and long-haul fiber, ILEC and Fios footprint, its metro network build-out, lit and dark fiber services, and 5G network. Verizon believes that the drive toward real-time decision-making using inferencing will be what drives demand for additional computing power.  The company cites a McKinsey report, which states that 60% to 70% of AI workloads are expected to shift to real-time inference by 2030. That will create an urgent need for low-latency connectivity, compute and security at the edge beyond current demand.

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Trump’s 100% tariff threat on Taiwan chips raises cost, supply chain fears

“I don’t think we will see a near-term impact, as it takes years to build fabs, but by the end of the decade, the US share could rise by a few percentage points,” Gupta said. “It’s hard to give an exact number, but if I were to estimate, I’d say 14-15%. That isn’t a lot, but for the US to gain share, someone else must lose it, and while the US is making efforts, we see similar developments across Asia.” Yet, if Washington imposes smaller tariffs on imports from countries such as India, Japan, or Malaysia, Taiwanese chipmakers may shift production there rather than to the US, according to Stephen Ezell, vice president at the Information Technology and Innovation Foundation (ITIF). “Additionally, if the tariffs applied to Chinese chip exports were lower than for Taiwanese exports, Trump would be helping Chinese semiconductor manufacturers, whose exports to the US market would then be less expensive,” Ezell said in a recent note. “So, for this policy to have any real effect, Trump effectively must raise tariffs on all semiconductors, and that would likely lead to global tit-for-tat.” Enterprise IT faces tough choices If semiconductor tariffs drive up costs, enterprises will be forced to reassess spending priorities, potentially delaying or cutting investments in critical IT infrastructure. Rising chip prices could squeeze budgets for AI, cloud computing, and data center expansions, forcing businesses to make difficult trade-offs. “On the corporate side, hyperscalers and enterprise players need to brace for impact over the next 2-3 years if high tariffs continue along with the erosion of operating margin,” Faruqui said. “In addition, the boards and CEOs have to boldly make heavy CAPEX investment on US Soil via US and Asian partners as soon as possible to realize HVM on US soil and alleviate operating margin erosion due to

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New tweak to Linux kernel could cut data center power usage by up to 30%

When network traffic is heavy, it is most efficient, and delivers the best performance, to disable interrupts and run in polling mode. But when network traffic is light, interrupt-driven processing works best, he noted. “An implementation using only polling would waste a lot of resources/energy during times of light traffic. An implementation using only interrupts becomes inefficient during times of heavy traffic. … So the biggest energy savings arise when comparing to a high-performance always-polling implementation during times of light traffic,” Karsten said. “Our mechanism automatically detects [the amount of network traffic] and switches between polling and interrupt-driven to get the best of both worlds.” In the patch cover letter, Damato described the implementation of the new parameter in more detail, noting: “this delivery mode is efficient, because it avoids softIRQ execution interfering with application processing during busy periods. It can be used with blocking epoll_wait to conserve CPU cycles during idle periods. The effect of alternating between busy and idle periods is that performance (throughput and latency) is very close to full busy polling, while CPU utilization is lower and very close to interrupt mitigation.” Added Karsten: “At the nuts and bolts level, enabling the feature requires a small tweak to applications and the setting of a system configuration variable.” And although he can’t yet quantify the energy benefits of the technique (the 30% saving cited is best case), he said, “the biggest energy savings arise when comparing to a high-performance always-polling implementation during times of light traffic.”

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Macquarie’s Big Play in AI and HPC: $17+ Billion Invested Across Two Data Center Titans

Macquarie Asset Management (MAM) is making bold moves to position itself as a dominant force in the rapidly growing sectors of AI and high-performance computing (HPC). In a single week, MAM has made two pivotal investments in Applied Digital and Aligned Data Centers, committing over $17 billion to fuel innovation, growth, and capacity expansion in critical infrastructure markets across the Americas. Both deals highlight the immense demand for AI-ready and HPC-optimized data centers, underscoring the ongoing digitization of the global economy and the insatiable need for computing power to drive artificial intelligence (AI), machine learning (ML), and other resource-intensive workloads. Applied Digital Partners with Macquarie Asset Management for $5 Billion HPC Investment On January 14, Applied Digital Corporation announced what it billed as a transformative partnership with Macquarie to drive growth in HPC infrastructure. This agreement positions Applied Digital as a leading designer, builder, and operator of advanced data centers in the United States, catering to the growing demands of AI and HPC workloads. To account for the $5 billion commitment, funds managed by MAM will invest up to $900 million in Applied Digital’s Ellendale HPC Campus in North Dakota, with an additional $4.1 billion available for future HPC projects. This could support over 2 gigawatts (GW) of HPC data center development. MAM is a global asset manager overseeing approximately $633.7 billion in assets. Part of Australia-based Macquarie Group, it specializes in diverse investment solutions across real assets, real estate, credit, and equities. With its new landmark agreement with Macquarie, Applied Digital feels it is poised to redefine the HPC data center landscape, ensuring its place as a leader in the AI and HPC revolution. In terms of ownership structure, MAM’s investment here includes perpetual preferred equity and a 15% common equity interest in Applied Digital’s HPC business segment, allowing

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Data Center Frontier Announces Editorial Advisory Board for 2025 DCF Trends Summit

Nashua, NH – Data Center Frontier is excited to announce its Editorial Advisory Board for the second annual Data Center Frontier Trends Summit (DCF Trends Summit), taking place August 26-28, 2025, at the Hyatt Regency Reston in Reston, Virginia.  The 2025 DCF Trends Summit Editorial Advisory Board includes distinguished leaders from hyperscale and colocation operators, power and cooling solutions companies, IT and interconnection providers, and design/build/construction specialists. This year’s board has grown to include 15 esteemed executives, reflecting DCF’s commitment to providing comprehensive and diverse insights for the data center sector.  This visionary group of leaders, representing the critical facets of the data center ecosystem, will guide the event’s content and programming to address the most pressing trends impacting the industry. The group’s unparalleled expertise ensures the Summit will deliver essential insights to help data center stakeholders make informed decisions in the industry’s rapidly evolving landscape.  The Editorial Advisory Board for the 2025 DCF Trends Summit includes:  Scott Bergs, CEO, Dark Fiber & Infrastructure (DF&I) Steven Carlini, VP, Innovation and Data Center Energy Management Business, Schneider Electric Dan Crosby, CEO, Legend Energy Advisors Rob Coyle, Director of Technical Programs, Open Compute Project (OCP) Foundation Chris Downie, CEO, Flexential Sean Farney, VP of Data Centers, Jones Lang LaSalle (JLL) Mark Freeman, VP of Marketing, Vantage Data Centers Steven Lim, SVP of Marketing & GTM Strategy, NTT Global Data Centers David McCall, VP of Innovation, QTS Data Centers Nancy Novak, Chief Innovation Officer, Compass Datacenters Karen Petersburg, VP of Construction & Development, PowerHouse Data Centers Tara Risser, Chief Business Officer, Cologix Stefan Raab, Sr. Director, Business Development – AMER, Equinix Phill Lawson-Shanks, Chief Innovation Officer, Aligned Data Centers Brenda Van der Steen, VP of Global Growth Marketing, Digital Realty “The Editorial Advisory Board for the second annual Data Center Frontier Trends Summit is

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Podcast: Data Center Trends Discussion with Industry Veteran Ron Vokoun of Everus Construction Group

For this episode of the Data Center Frontier Show Podcast, DCF Editor in Chief Matt Vincent and Senior Editor David Chernicoff sat down for a far-reaching discussion with data center industry luminary Ron Vokoun, a 35-year veteran of the construction industry with a primary focus on digital infrastructure.  “I got into telecom back in ’92, which led to data centers,” Vokoun said. “Probably worked on my first one around ’96 or ’97, and I’ve been involved ever since.” Currently the Director of National Market Development for Everus Construction Group, Vokoun has been involved in AFCOM, both regionally and nationally, for nearly two decades and is an emeritus content advisory board member for Data Center World. He has also written extensively for Data Center Dynamics. He added, “I’ve just always been curious—very much a learner. Being a construction guy, I often write about things I probably have no business writing about, which is always the challenge, but I’m just curious—a lifelong learner. Interestingly, [DCF founder] Rich Miller … gave me my first blogging opportunity.” Here’s a timeline of the podcast’s highlights: Introductions – Ron Vokoun shares his extensive background. He has been in the construction industry for 35 years. 1:46– On his role at Everus Construction Group and the company’s diverse services across the nation. 2:07– Vokoun reflects on his long-standing relationship with Rich Miller. He acknowledges Rich’s influence on his blogging career. 3:05 Nuclear Energy – A discussion about nuclear energy trends occurs. The importance of nuclear energy in data center construction is probed. 3:35– Natural gas is highlighted as a key trend. Its role as a gateway to hydrogen is emphasized. 3:51– The impact of recent nuclear developments is analyzed. The reopening of Three Mile Island is noted as significant. 4:55 Future Power Sources for Data Centers – Discussion turns to the

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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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