A new era is beginning in the United States. The second term of U.S. President Donald Trump is now underway. There are a lot of expected changes coming and happening in all industries. This includes data centers, which face their unique set of challenges and will now have to solve them in a fast-changing environment where a lot of rules and goals are expected to change.
President Trump is coming back and this time he has vowed to focus mainly on the business and economy, reversing a lot of previously set deadlines, refocusing green initiatives, and changing regulations to accommodate specific industries like crypto, etc. All of this is expected to happen relatively fast as Trump wants changes to be swift so there’s enough time for them to start giving results during his term.
Whether or not they will produce the desired results remains to be seen, but what’s for sure is that Trump will have all the needed power to make the changes he’s promised. And even during the days before his official inauguration, he started to lay the groundwork for their realization.
The first steps are key
Donald Trump spent a big portion of his campaign dedicated to the changes he will bring to IT-related industries. He focused especially on crypto currencies, IT giants, social media and AI. All of them happen to be very closely related to data centers. So every change in these sectors will reflect on data centers, as well. But also, Trump is preparing to reform the energy sector in the US, which is, surprise, also critical for data centers.
Of course, in order to make these ideas a reality, President Trump will need a team. Many people were looking at his nominations for key regulators as an indicator of whether or not he intends to fulfil his promises or if they were only campaign slogans.
Trump’s first nominations were very telling as he appointed key people to the most important agencies and departments. They all have one thing in common – long histories of supporting the exact changes Trump has promised. This is a clear sign they will work hard to make them a reality and that the President will trust them to do so.
One of the latest announcements was the new Commissioner for the Federal Communications Commission (FCC). It’s one of the most important regulators for IT companies and is seen as a window into what to expect from the new administration in the next four years. The FCC board will be completed by Olivia Trusty who, up to now, was the Policy Director on the United States Senate Committee on Commerce, Science and Transportation. She will work alongside FCC Chairman Brendan Carr and as stated by Trump, they have a task to “cut regulations at a record pace, protect Free Speech, and ensure every American has access to affordable and fast Internet.”
The appointment will also give the Republicans a 3 to 2 majority in the FCC which means it should be smooth sailing for the administration to pass the desired changes.
She was well accepted by some key telecom companies. Comcast’s Chief Legal Officer Tom Reid said: “Olivia Trusty’s extensive knowledge of communications policy makes her an exceptional choice as FCC Commissioner. We look forward to working with her and with the full FCC to address the nation’s crucial communication needs including broadband investment and deregulation. We applaud President-elect Trump on this strong choice.”
President Trump also made a key nomination for Energy Secretary. He chose Chris Wright who vowed to quickly expand the U.S. production of energy and make the supply more reliable and affordable. This means less focus on green energy sources and more focus on fast production and lower prices. “The security of our nation begins with energy,” Chris Wright told the Senate Energy and Natural Resources Committee during his confirmation hearing. “Previous administrations have viewed energy as a liability instead of the immense national asset that it is.”
Wright is known as a supporter of fossil fuels and sees them as a way to keep prices down and energy affordable. He’s made some controversial statements claiming there’s no climate crisis and that “life on earth is simply impossible without carbon dioxide — hence the term carbon pollution is outrageous.”
He does not dispute climate change, however. Wright says it’s real and should be tackled by investments in new technologies which the Department of Energy will continue to do. Despite that it’s clear he will prioritize Trump’s promises on energy. And they include more power plants, restarting both older nuclear and coal plants and expanding the electrical grids. The main goal – cut the price of energy by half.
The data center “inheritance” from the Biden administration
President Trump isn’t the only one who thinks about data centers. The same was done by President Joe Biden. Near the very end of his term, President Biden issued an Executive Order on Advancing United States Leadership in Artificial Intelligence Infrastructure. A long name with short and clear goals.
“For the data center industry, the policy marks a clear shift toward a strategic, mission-critical role in national security and economic resilience. The Executive Order’s vision also aligns with definitively emerging trends in the contemporary data center industry, particularly the pivot toward sustainability and energy efficiency,” says DataCenterFrontier in an analysis.
The policy defines “AI data centers” and wants to create a regulatory framework to streamline the development and improve cybersecurity and supply chain integrity. “It highlights the need to build AI infrastructure domestically to prevent reliance on foreign systems and protect against adversaries. The development of AI requires significant private-sector investment in advanced computing clusters and energy resources. The order ties AI development to leadership in clean energy technologies and underscores the importance of secure supply chains, labor benefits, community collaboration, and maintaining affordable electricity costs,” the analysis says.
The Executive Order also focuses on “clean energy” which is where it can fall into conflict with the new President’s agenda. The goal of the Order though isn’t to be a strict rulebook on what to do, but more of a roadmap. It sets ambitious goals – identification of sites to build the new data center in early 2025 and have the first data centers in operation by 2027. The criteria though are more balanced and not so strict. The main goal seems to be more to foster collaboration between the industry and the institutions, including to seek a solution to possible regulatory restrictions or delays.
“The bottom line is that President Biden’s Executive Order marks a defining moment in the intersection of AI, clean energy, and federal leadership. And by addressing both the technical and regulatory bottlenecks, Sections 8 through 10 of the document pretty much lay the groundwork for the next generation of AI-driven data centers. The focus on transmission infrastructure is pivotal. High-density AI data centers, often consuming hundreds of megawatts, require robust, future-proofed grids. The plan’s inclusion of grid-enhancing technologies is a forward-looking move, but the real test will be the ability to overcome permitting challenges and secure domestic supply chains for critical components,” says the analysis.
So, what to expect from the new administration
It remains to be seen if President Trump will keep this Executive Order or if he will edit or cancel it. “An increasingly important key investment criterion for data center investors in developed markets, particularly in the US, has been the speed at which platforms can deploy their infrastructure to maximize returns within their designated periods. We expect investors to increase their deployments in the US under the new presidency if the second Trump administration can enhance the speed, scale, and cost-efficiency of bringing new data centers to market,” says says Niccolo Lombatti, TMT industry analyst at BMI to DataCenterDynamics.
Lombatti doesn’t see President Biden’s Executive Order as enough. “The project involves a series of conditionality clauses, including the usage of clean energy sources and U.S.-manufactured semiconductor technologies. These can dampen investor interest in the scheme, particularly from platforms that cannot procure the designated hardware or technical requirements. It is also the case that Federal Land plots may not appeal to investors if these are located in sub-optimal locations, such as away from fiber lines and customers looking to deploy latency-sensitive use cases.”
Lombatti says if Trump wants to see a big progress in the data center area, he and his administration will have to intervene more. He gives an example of the UK where recently the government gave a national priority status to data centers thus giving such projects the green light even if the local council is opposing them. “Though politically sensitive, there is a global trend of central governments intervening in data center regulation for their Tier 1 sub-markets, driven by AI’s increasing importance to national security and its potential to enhance employment and growth, particularly in the U.S.,” Lombatti says. This approach “has shown positive effects on investor confidence,” he adds.
It remains a touchy subject, though. Local communities might not respond well to such tactics and President Trump has positioned himself as listening to them. He will be careful not to lose that support.