White House AI Action Plan Signals Environmental Regulation Reform for Data Centers

On July 23, 2025, the White House released “Winning the Race: America’s AI Action Plan” (“AI Action Plan”), outlining over 90 planned federal policy actions the Trump administration plans to implement to speed up artificial intelligence development across the United States. This rapid growth in domestic AI will result in an unprecedented U.S. demand for energy and require siting of significant electric generation assets to operate supporting infrastructure. Electricity demand from data centers represents a major new source of electricity demand and redundancy that will likely require a modernized approach to permitting and regulation to support sufficient growth on the Trump administration’s desired trajectory. For additional information on the impact of AI growth and the challenges of associated data center permitting, see Sidley’s blog posts here and here.

Among other goals, Pillar II of the AI Action Plan calls for an overhaul of America’s physical and digital infrastructure. According to the AI Action Plan, environmental permitting and other regulations throughout the United States make it almost impossible to build infrastructure at the necessary speed to meet demand. To address such obstacles, the plan sets out the following key environmental regulatory goals focused on data center construction, grid modernization, and increased semiconductor manufacturing. Central to Pillar II is the call for dramatic acceleration of environmental permitting for and deregulation of data centers, semiconductor facilities, and energy infrastructure. The recommendations include:

• Creating new categorical exclusions under the National Environmental Policy Act for routine data center-related construction.
• Exploring the need for a nationwide Clean Water Act (“CWA”) Section 404 permit for data centers to remove pre-construction delays.
• Streamlining permitting or reducing regulations under the CWA, Clean Air Act (“CAA”), and Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”).
• Directing agencies with significant federal lands available to identify sites suited for large-scale construction of data centers and associated power generation infrastructure.

The plan does not specify what further executive or legislative authority is required to accomplish these recommendations. However, on the same day, President Trump also released multiple executive orders and corresponding fact sheets, including order “Accelerating Federal Permitting of Data Center Infrastructure.” The order directs the Department of Commerce to launch an “initiative” to fund “Qualifying Projects,” which are defined to include: data centers that require greater than 100 megawatts of new load; infrastructure projects related to data center energy needs, semiconductor facilities, or networking equipment; or other data center or related infrastructure projects selected by the Department of Defense, Department of the Interior, Department of Commerce, or Department of Energy. It goes on to direct such agencies, the U.S. Environmental Protection Agency (“EPA”), and others to undergo various actions aimed at accomplishing the AI Action Plan’s recommendations outlined above. Any revisions to regulations under the CWA, CAA, CERCLA, and other environmental statutes to streamline permitting or deregulate may require public notice and comment periods, and may spark litigation by interested parties.

These calls to remove barriers caused by environmental regulations to construction of AI-related data centers and other AI infrastructure align with several Trump administration executive orders released earlier this year, such as the January 2025 order “Removing Barriers to American Leadership in AI.” EPA Administrator Lee Zeldin also previously announced that ensuring the United States is the AI capital of the world is a key tenant of his EPA leadership.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.