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Trump's fossil-fueled AI Action Plan pushes deregulation

The Trump administration's AI Action Plan and executive orders include deregulation that would fast-track data center and chip buildouts while boosting the power grid.

Shane Snider
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Published: 24 Jul 2025

The White House on Wednesday unleashed its AI Action Plan and accompanying executive orders, which include sweeping deregulation efforts the administration said will enable the U.S. to "dominate" in the artificial intelligence arms race.

One of President Donald Trump's executive orders revokes former President Joe Biden's January EO establishing AI infrastructure guidance.

Trump's plan would let tech companies skirt Clean Water Act and Clean Air Act regulations to fast-track data center and chip manufacturing construction. The plan would also allow large-scale data centers and semiconductor manufacturing on federal lands. Current environmental laws restrict the use of federal lands for commercial construction.

It also instructs the Environmental Protection Agency to assist in "expediting permitting" on federal and nonfederal lands by developing or modifying current regulations for data center projects that cost at least $500 million.

"America's environmental permitting system and other regulations make it almost impossible to build this infrastructure in the United States with the speed that is required," according to the action plan, which expands "Categorical Exclusions" to National Environmental Policy Act regulations. NEPA requires data center developers to conduct and submit for review environmental impact assessments.

Kristian Stout, director of innovation policy at the International Center for Law and Economics, said the action plan is aimed squarely at competing with China's AI efforts. China relies heavily on coal to power its electricity demands, while the U.S. leans on natural gas. The U.S. grid system is fragmented, while China has a national system.

"The goal is to be able to do what China seems to be able to do, which is stand up energy quickly and stand up infrastructure for data centers quickly, which helps their companies get access to large data sets to spin up new startups quickly," Stout said.

Politics aside, a comprehensive national AI strategy was needed, according to Steven Dickens, CEO and principal analyst at HyperFrame Research.

"This is the administration realizing that there's an existential threat and mobilizing the U.S. tech sector," he said. "We are completely architecting the tech stack -- that's everything from power generation through data centers, and right up to the software layer."

Death knell for sustainability?

Trump's AI agenda puts AI advancement ahead of corporate sustainability efforts. "[W]e will continue to reject radical climate dogma and bureaucratic red tape, as the Administration has done since Inauguration Day," according to Trump's action plan.

Many big tech companies have developed aggressive environmental, social and governance (ESG) policies to reduce or eliminate their carbon footprints and address global climate change concerns. The administration's push to increase nonrenewable energy sources like coal and natural gas could make those plans harder to achieve, critics warned.

"This U.S. AI Action Plan doesn't just open the door for Big Tech and Big Oil to team up, it unhinges and removes any and all doors -- it opens the floodgates," said KD Chavez, executive director of the Climate Justice Alliance, in a statement. "We need more corporate and environmental oversight, not less."

Tech companies including Google, Microsoft and Apple have pledged net-zero carbon emissions by 2030. But the surge in power-hungry AI data centers has companies reshaping ESG goals.

A recent report by The Conference Board, a nonprofit think tank, found that 80% of 125 large U.S. and multinational companies surveyed have changed ESG goals since Trump's inauguration.

Given the race to build out data center projects and the rules to do so, clawing back regulatory oversight could prove tricky even with the next change in administrations, Stout said.

"That's going to be difficult to wind that back if you actually get these data centers built and the energy permits granted ... then you're going to be in a court process -- you can't just revoke them on the spot," he said. Stout added that if the plan finds success in making AI gains against China, "it's going to be hard for a future administration to attack that."

Dickens believes that business efficiency will still drive renewable energy innovation, pointing to the need for more efficient cooling options to drive down power consumption and costs. But in the short term, he said, natural gas will be the most attractive solution.

"Renewables don't give us the constant power that GPUs need, but they will still be a key part of the grid," Dickens said.

AI infrastructure safety, security addressed

The action plan also aims to safeguard AI infrastructure by ensuring that "the domestic AI computing stack is built on American products" and that energy and telecommunications sectors are free from foreign software and hardware.

The Trump administration also worked with several nonpartisan AI safety advocates for input earlier this year.

"These measures, combined with the plan's emphasis on domestic chip production and export control enforcement, create a robust framework for maintaining America's AI advantage," said Varun Krovi, executive director at the Center for AI Safety Action Fund, in a statement. He said the action plan "offers a coherent and comprehensive roadmap for ensuring U.S. leadership in the development of safe, transformational AI."

The security effort extends to data centers for military and intelligence use. The plan calls for the creation of new AI data center security standards to be led by government agencies and advancing the adoption of "classified compute environments" that support AI workloads.

Changes to CHIPS Act

The AI Action Plan also looks to bolster the effort to encourage a domestic semiconductor supply chain, promising to remove "extraneous" policy requirements for the Biden administration's CHIPS Act.

"The Trump administration will lead that revitalization without making bad deals for the American taxpayer or saddling companies with sweeping ideological agendas," according to the plan.

The CHIPS Act, which Biden signed into law in 2022, promised nearly $53 billion in grants and incentives for domestic semiconductor manufacturing. The act included rigorous labor, security and environmental standards.

Semiconductor projects with a minimum $500 million investment would also qualify for expedited federal permitting and federal land use, according to Trump's executive order.

Shane Snider, a veteran journalist with more than 20 years of experience, covers IT infrastructure at Informa TechTarget.

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