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Released January 15, 2025 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--President Joe Biden on Tuesday signed an executive order opening up federal lands for gigawatt-scale data centers capable of meeting the rigorous data needs of artificial intelligence (AI) and cloud computing.
The order mandates that the Department of Energy and Department of Defense each pick three suitable sites that are overseen by the agencies in order to house new data centers and power operations, paving the way for six facilities. Under the order, private companies will lease the land, pay for the construction and operation of the data centers, and be responsible for ensuring a supply of clean energy to power the new facilities. These companies also will have to buy "an appropriate share" of U.S.-made semiconductors for the facilities.
The manufacture of semiconductors is once again booming in the U.S. as companies take advantage of financing and grants supplied by the 2022 CHIPS and Science Act. Industrial Info is tracking more than $350 billion worth of active projects for the manufacture of semiconductors and related devices in the U.S., including more than $47 billion worth that are under construction. Leading the way is Intel Corporation (NASDAQ:INTC) (Santa Clara, California), whose largest project brings an estimated $30 billion price tag in Chandler, Arizona, near Phoenix, for the construction of two fabrication buildings. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can learn more by viewing the project report.
The executive order comes as several other related wheels turn. On Monday, the Biden administration announced new restrictions on the export of the most advanced AI chips to several countries, including China. "Over the coming years, AI will become really ubiquitous in every business application in every industry around the world, with enormous potential for enhanced productivity and societal, health care and economic benefits," said Commerce Secretary Gina Raimondo to the news media. "That being said, as AI becomes more powerful, the risks to our national security become even more intense." China has attacked the move as a violation of international trade rules.
The power use addressed by the order also has been an increasingly important issue in the states and communities where data centers are being built. AI-enabled data centers use substantially more power than standard colocation services, hence the stipulation of gigawatt-scale facilities. These could grow even larger as time passes. White House technology adviser Tarun Chhabra told reporters that by around 2028 leading AI developers will be looking at data centers with as much as 5 gigawatts of capacity for training their AI models.
As data center operators seek to minimize the environmental footprints of their facilities, clean energy use, also addressed by the executive order, has become a priority. Every week seems to bring news of power purchase agreements (PPAs) made between clean energy developers and data center operators. Most often, this allocated power comes from wind and solar facilities, but Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington) has taken things one step further as it discusses the reopening of the 837-megawatt Unit 1 of the Three Mile Island nuclear power plant in Pennsylvania, which was closed for economic reasons in 2019, to power its operations. Microsoft has signed a 20-year PPA with plant owner Constellation Energy Corporation (NYSE:CEG) (Baltimore, Maryland), although the restart of the unit must receive authorization from the Nuclear Regulatory Commission. For more information, see September 2, 2024, article - Constellation, Microsoft Want to Restart Three Mile Island to Power Data Centers.
By calling on the developers of the six sites to obtain clean energy to power the new facilities, the executive order opens the way for further renewable and nuclear development, perhaps even easing the way for the implementation of small modular reactors (SMRs) at the sites, a technology that is becoming closer to implementation as companies try to reduce the costs and size of traditional nuclear power plants while benefitting from emissions-free operations.
In addition to size and power stipulations, Biden's order also mandates that the developers pay workers "prevailing wages," meaning more jobs in areas that may not have an appropriate existing workforce.
As the Biden administration wanes, the order supports the U.S.' increased competitiveness in the rapidly developing AI and data center sector.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
The order mandates that the Department of Energy and Department of Defense each pick three suitable sites that are overseen by the agencies in order to house new data centers and power operations, paving the way for six facilities. Under the order, private companies will lease the land, pay for the construction and operation of the data centers, and be responsible for ensuring a supply of clean energy to power the new facilities. These companies also will have to buy "an appropriate share" of U.S.-made semiconductors for the facilities.
The manufacture of semiconductors is once again booming in the U.S. as companies take advantage of financing and grants supplied by the 2022 CHIPS and Science Act. Industrial Info is tracking more than $350 billion worth of active projects for the manufacture of semiconductors and related devices in the U.S., including more than $47 billion worth that are under construction. Leading the way is Intel Corporation (NASDAQ:INTC) (Santa Clara, California), whose largest project brings an estimated $30 billion price tag in Chandler, Arizona, near Phoenix, for the construction of two fabrication buildings. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can learn more by viewing the project report.
The executive order comes as several other related wheels turn. On Monday, the Biden administration announced new restrictions on the export of the most advanced AI chips to several countries, including China. "Over the coming years, AI will become really ubiquitous in every business application in every industry around the world, with enormous potential for enhanced productivity and societal, health care and economic benefits," said Commerce Secretary Gina Raimondo to the news media. "That being said, as AI becomes more powerful, the risks to our national security become even more intense." China has attacked the move as a violation of international trade rules.
The power use addressed by the order also has been an increasingly important issue in the states and communities where data centers are being built. AI-enabled data centers use substantially more power than standard colocation services, hence the stipulation of gigawatt-scale facilities. These could grow even larger as time passes. White House technology adviser Tarun Chhabra told reporters that by around 2028 leading AI developers will be looking at data centers with as much as 5 gigawatts of capacity for training their AI models.
As data center operators seek to minimize the environmental footprints of their facilities, clean energy use, also addressed by the executive order, has become a priority. Every week seems to bring news of power purchase agreements (PPAs) made between clean energy developers and data center operators. Most often, this allocated power comes from wind and solar facilities, but Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington) has taken things one step further as it discusses the reopening of the 837-megawatt Unit 1 of the Three Mile Island nuclear power plant in Pennsylvania, which was closed for economic reasons in 2019, to power its operations. Microsoft has signed a 20-year PPA with plant owner Constellation Energy Corporation (NYSE:CEG) (Baltimore, Maryland), although the restart of the unit must receive authorization from the Nuclear Regulatory Commission. For more information, see September 2, 2024, article - Constellation, Microsoft Want to Restart Three Mile Island to Power Data Centers.
By calling on the developers of the six sites to obtain clean energy to power the new facilities, the executive order opens the way for further renewable and nuclear development, perhaps even easing the way for the implementation of small modular reactors (SMRs) at the sites, a technology that is becoming closer to implementation as companies try to reduce the costs and size of traditional nuclear power plants while benefitting from emissions-free operations.
In addition to size and power stipulations, Biden's order also mandates that the developers pay workers "prevailing wages," meaning more jobs in areas that may not have an appropriate existing workforce.
As the Biden administration wanes, the order supports the U.S.' increased competitiveness in the rapidly developing AI and data center sector.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
