AI Industrial Strategy Under Trump 2.0, Part II
Barriers, Bypasses, Buildouts—the New Frontier of Extraction
We are in the midst of a new infrastructural order where the biggest tech firms—led by Meta, Alphabet, Microsoft, and Amazon—are spending record sums on physical assets like data centers, factories, and energy, with their combined quarterly capital expenditures recently surpassing $100 billion. This wave of investment parallels the era of the industrial titans, as today's giants deepen their competitive moats through vertical integration and monopolization of resources, talent, and strategic sites—including former steel mills repurposed for data centers.
This corporate buildout is not occurring in a vacuum—it is being actively enabled and accelerated by state policy. On Wednesday, July 23, 2025, the Trump administration released its AI Action Plan and companion website, ai.gov. Billed as a national “renaissance,” the plan casts artificial intelligence as the decisive frontier in a new era of strategic competition—where technological supremacy is not only a pathway to prosperity, but a condition for security, sovereignty, and survival. Its messaging is unequivocal:
“Win the AI race, and America secures its future; lose, and it risks irrelevance.”
This framing echoes across both official policy and corporate rhetoric. In a Substack post on launch day, OpenAI described its 4.5 GW Stargate expansion as a “democratic” countermodel to China’s “state-led authoritarian” approach, warning that “the window to shape this future is closing fast.” But behind the language of urgency and empowerment lies a sweeping consolidation of state authority to accelerate infrastructure, deregulate oversight, and channel public resources toward fossil-powered compute buildouts—slyly recasting environmental law, land use policy, and democratic review as impediments to national competitiveness.
The plan codifies a direction already set in motion. Since early 2025, the administration has issued a flurry of executive orders dismantling Biden-era rules on climate, equity, and AI governance while invoking a national energy emergency to fast-track fossil and nuclear development. What began as discrete policy shifts has now been woven into a unified strategy: compress permitting timelines, roll back oversight, mobilize federal procurement, and open public lands to hyperscale infrastructure. In effect, the state is retooled to serve as a growth engine for private cloud and compute capital.
Major technology firms—Alphabet, Meta, Microsoft, Nvidia—have lobbied aggressively for these outcomes, winning regulatory relief, procurement preferences, and public subsidies. But while industry celebrates, over a hundred labor, civil rights, and environmental groups have condemned the plan as a corporate land grab disguised as national renewal. Even centrist policy experts caution that the rollback of antitrust enforcement, defunding of research, and restrictions on immigration threaten long-term innovation in favor of short-term consolidation.
At its core, the AI Action Plan is not about ethics or algorithms—it is about infrastructure. The governing logic is clear: accelerate the deployment of fixed capital—data centers, semiconductor fabs, energy systems, and transmission corridors—and clear the regulatory, legal, and territorial pathways to make it possible. Public governance is subordinated to private investment imperatives. The apparatus of the state, once tasked with balancing public interests, is now marshaled to eliminate “friction” for capital.
This analysis builds on Part I of AI Industrial Policy Under Trump 2.0, which outlined the administration’s early moves to redefine AI through a national security lens. Those tactical shifts are now formalized into a systemic program of infrastructural acceleration and techno-industrial enclosure.
Barriers—Clearing the Way for AI Industrialization
The Trump administration’s AI strategy is not a conventional policy roadmap; it is a systematic dismantling of regulatory guardrails in the service of digital capitalism. From its earliest days, a cascade of executive orders reoriented the federal bureaucracy around one goal: to eliminate legal and institutional constraints on AI-driven infrastructure expansion. A January 20 order repealed Biden-era mandates on climate, equity, and algorithmic safety. The same day, a national energy emergency was declared, framing energy-intensive AI development as a matter of security. A subsequent January 23 order instructed agencies to eliminate “barriers” to innovation and prioritize competitiveness and national security over accountability. Then, on January 31, a sweeping deregulatory order required agencies to repeal ten existing rules for every new one and maintain negative net regulatory cost. These moves, overseen by an empowered Office of Management and Budget (OMB), recast regulatory authority as an engine for capital formation rather than public protection.
The strategy centers on energy, rebranding fossil fuels and nuclear power as essential to AI development. An April 8 executive order revives coal under a national security rationale, dismantling environmental protections, expanding federal leasing, and linking coal-fired generation to data center growth. Three subsequent nuclear orders advance this agenda by reinvigorating the industrial base, deploying advanced reactors, and restructuring the Nuclear Regulatory Commission. Together, they accelerate licensing, expand uranium enrichment and fuel recycling, and authorize Defense Production Act powers to guarantee offtake agreements and financing. Deregulation is paired with subsidies, loan guarantees, and export promotion, embedding high-cost, high-risk fossil and nuclear infrastructure into the federally supported foundation of AI-driven industrial growth.
Procurement reforms further entrench this industrial realignment. The April 15 order, “Restoring Common Sense to Federal Procurement,” strips discretionary compliance provisions from the Federal Acquisition Regulation, enabling agencies to bypass environmental, labor, and equity requirements. OMB memoranda M-25-21 and M-25-22 empower Chief AI Officers to prioritize domestic suppliers and accelerate delivery timelines. Procurement becomes a tool for accelerating infrastructure deployment, embedding private platforms in core state functions while shifting operational and financial risk onto public agencies. “Innovation” is the alibi for eroding oversight.
The plan also reaches into public education. An April 23 order establishes a national K–12 AI curriculum backed by over sixty corporations, including Amazon, Google, and Microsoft. These firms serve not just as advisors, but as platform providers—shaping tools, content, and pedagogy. Marketed as competitiveness policy, the initiative effectively transforms public education into a workforce pipeline, aligning civic institutions with private sector needs from an early age.
Legislatively, the strategy culminates in HR 1—the so-called “One Big Beautiful Bill”—signed into law on July 4. It codifies AI as a national security imperative, directing billions in subsidies to cloud infrastructure, defense AI applications, and microelectronics research. Military contractors are guaranteed demand pipelines, while the Department of Energy is tasked with building an “American Science Cloud” to centralize federal data and computing power. Under the idea of “technological sovereignty,” public resources are redeployed as profit engines for private firms—absent meaningful democratic or environmental oversight.
These executive and legislative maneuvers converge in the AI Action Plan’s generic-sounding first pillar—“Accelerate AI Innovation.” Yet, federal funding is weaponized to discipline state and local policy. Jurisdictions imposing “burdensome AI regulations” risk losing access to grants and contracting opportunities. Algorithmic accountability, once a governance priority, is reframed as an obstacle to market dynamism. Behind the rhetoric of “consumer choice” lies a deeper restructuring of regulatory federalism—subordinating subnational autonomy to the imperatives of infrastructural acceleration.
Bypasses—The Energy–AI Nexus and Grid Politics
At the heart of the AI Action Plan lies a central assumption: no AI future without abundant, uninterrupted power. This is a central underlying feature of Pillar II, “Build American AI Infrastructure.” Energy, once framed as a public utility or climate concern, is recast as a strategic weapon in a geopolitical arms race. The plan warns that U.S. capacity has stagnated since the 1970s and must now be radically expanded—not for decarbonization, but to serve compute-intensive growth—echoing the drive to restrict renewables, retrench fossil fuels, and expand nuclear energy.
Projected demand figures are staggering. Data centers already consume about 4% of U.S. electricity, and that share could triple by 2030. Deloitte projects load could increase thirtyfold, from roughly 4 GW today to 123 GW by 2035. Yet instead of pursuing equitable or climate-conscious grid modernization, the Action Plan entrenches reliance on fossil fuels and nuclear power—reversing coal retirements, subsidizing gas-fired plants, and accelerating reactor approvals. Transmission and storage investments are nominally included, but the underlying financial structure favors capital-intensive, centralized infrastructure, locking in the dominance of investor-owned utilities.
This is not technical modernization—it is strategic entrenchment. Utilities like NextEra, Duke, and Dominion, guaranteed profits through regulated rates of return, stand to extract significant rents from speculative overbuilds marketed as “AI readiness.” Ratepayers, however, are offered no protections against the costs. Meanwhile, tech giants increasingly pursue co-location deals, securing direct energy supply from adjacent generation sites. Though the Federal Energy Regulatory Commission (FERC) blocked Amazon’s 2024 attempt to link a data center to Talen Energy’s Susquehanna nuclear plant, the Action Plan now aims to normalize such arrangements—particularly under emergency provisions designed to bypass procedural safeguards.
FERC itself is undergoing transformation. With Project 2025 advisor David LeCerte appointed to a leadership role, the Commission has aligned more closely with administration goals. In February, FERC launched a “show-cause” proceeding against PJM Interconnection—the country’s largest grid operator—pressuring it to revise cost-sharing rules and accelerate siting for AI-linked infrastructure. These actions build on earlier Orders 1920 and 2023, which require long-term transmission planning and faster, centralized approval processes. FERC is no longer just regulating the grid; it is actively reshaping it to serve digital infrastructure development.
The deregulatory push extends beyond electricity. The administration proposes eliminating rehearing-period protections for natural gas pipelines, allowing construction to begin immediately after initial approval. Justified under the national energy emergency, this rollback exemplifies a broader strategy: fast-track fossil infrastructure, displace environmental and property rights protections, and create a streamlined siting regime for compute-linked development.
In this vision, the grid is not a public good but an industrial platform. “Modernization” is stripped of its ecological content and redefined as utility-led overbuild. Environmental laws are reframed as bottlenecks; permitting becomes an accelerant for territorial expansion. What emerges is a political economy in which the foundational infrastructure of AI is not only energy-intensive, but fossil-fueled, investor-driven, and federally guaranteed—a structure designed to concentrate power while externalizing social and environmental risk.
Buildouts—Land, Permitting, and the Speculative Frontier
The other dimension of the Action Plan’s Pillar II focuses on the transformation of land use and environmental permitting into strategic instruments of industrial acceleration, dismantling long-standing legal safeguards to clear space—literally—for hyperscale expansion. A new executive order expands categorical exclusions under the National Environmental Policy Act (NEPA), streamlines Clean Water and Clean Air Act reviews, and applies the FAST-41 regime to compress permitting timelines from years to months. Blanket approvals are coupled with subsidies, tax credits, and guaranteed offtake agreements to insulate projects from litigation and de-risk investment. Environmental lawyers warn that these blanket exemptions risk ignoring site-specific harms, particularly to wetlands, waterways, and endangered species.
Nowhere is this more visible than on federal land, where the state plays both landlord and booster. Agencies are directed to identify “priority sites” for AI development, targeting deserts in the Southwest, deindustrialized regions in the Midwest, and contaminated zones like Brownfields and Superfund sites. Sixteen federally owned properties—many legacies of the Cold War nuclear and defense complex—are being rebranded as “AI-ready” zones. These include vast sites like the Idaho National Laboratory (890 sq mi), Savannah River Site (310 sq mi), and former uranium enrichment facilities in Paducah and Portsmouth. Urban-adjacent labs like Argonne (Chicago) and Brookhaven (Long Island) are favored for their access to labor markets, cooling water, and network infrastructure.
This territorial pivot is not accidental—it has been incubated by national security think tanks and AI-focused advocacy groups. The Special Competitive Studies Project and the Institute for Progress, among others, have pushed proposals for “Special Compute Zones” with relaxed regulation, direct subsidies, and streamlined permitting. These ideas now appear almost verbatim in HR 1, which authorizes land sales, grants infrastructure siting rights, and expands eminent domain authority to support AI-related development.
On the ground, this strategy is already in motion. Stranded coal plants are reimagined as energy anchors for data centers; old transmission corridors are retooled to serve compute campuses; remediated industrial sites are rebranded as innovation hubs. What emerges is not just a buildout—it is a spatial reordering of the country, where techno-industrial expansion exploits the fiscal and physical residue of past state-building projects.
While cloaked in the language of modernization and competitiveness, these developments enact a deeper logic of enclosure. Public lands, public subsidies, and public infrastructure are increasingly reserved for private cloud platforms and energy monopolies. Environmental protections are sidelined, local governance is preempted, and the risks—pollution, resource strain, community displacement—are externalized onto already-vulnerable populations. The frontier, once a metaphor, becomes a regulatory and territorial condition for AI-led growth.
Geopolitics — Compute Power as Strategic Doctrine
The AI Action Plan is not only domestic industrial policy—it is a geopolitical blueprint for organizing global power through infrastructure. At its center is a civilizational narrative. AI supremacy is framed as a zero-sum contest with China, where victory ensures U.S. prosperity and security, and loss signals decline. This framing extends the frontier logic of deregulation and enclosure outward, justifying the transformation of digital infrastructure into the hard assets of state power.
To operationalize this vision, another executive order creates the American AI Exports Program, which bundles hardware, software, models, and cloud infrastructure into a subsidized national offering for foreign markets. Backed by federal financing, this program reorients diplomacy and trade policy toward platform expansion, channeling public funds into the global ambitions of Amazon, Microsoft, Google, and Nvidia. Here, export strategy becomes market capture; diplomacy becomes corporate growth.
Domestically, the adversarial framing justifies sweeping institutional exceptions. What was once environmental governance or public interest planning is reclassified as a national defense concern. Under the Plan, agencies may override local review processes, invoke emergency powers, and deploy Defense Production Act authority to expedite infrastructure deemed critical to AI capacity. These moves not only concentrate state power but also delegitimize dissent: labor, environmental, or community resistance can now be cast as threats to national survival.
Meanwhile, the CHIPS Act’s “guardrails” are sharpened. Export controls on advanced semiconductors are tightened, and a new Technology Diplomacy Strategic Plan is launched to draw allies into alignment with U.S. supply chain policy. The geography of geopolitical influence shifts accordingly: fabs, server farms, and transmission corridors become the new bases of power projection. Compute capacity—once an economic asset—is reframed as a defense asset to be subsidized, secured, and geopolitically deployed.
In this landscape, corporate actors are elevated to national champions. Their infrastructure buildouts are presented not as private ventures but as patriotic imperatives. This fusion of state and cloud capital erodes the boundary between public and private, diplomacy and commerce, defense and development. What emerges is a techno-industrial bloc with state power reconfigured to defend and extend capital-intensive digital infrastructure.
The implications are profound. Internationally, this strategy risks intensifying technological militarization, triggering retaliation, and fueling a global infrastructure arms race. Domestically, it enshrines a political order in which militarized growth, territorial enclosure, and corporate consolidation are pursued under the banner of innovation. As the Council on Foreign Relations has warned, this approach may deliver short-term dominance but at the cost of long-term instability—environmental, diplomatic, and democratic.
At its core, what’s proposed is a geopolitical economy built on extraction—of resources, of territory, and of institutional legitimacy. Laws are rewritten, permitting weaponized, and risks offloaded onto communities and ecosystems. The spoils accrue to hyperscalers and utilities; the costs are socialized. The AI Action Plan thus marks not just a shift in industrial strategy, but the consolidation of a state-backed regime of techno-capital accumulation—premised on urgency, structured through exception, and sustained by the erosion of democratic constraint.
Conclusion—A New Infrastructural Order
Microsoft’s $4 trillion valuation—reached after a 4.5% stock jump—marks a historic surge driven largely by AI infrastructure demand, particularly through its Azure cloud services and deep ties to OpenAI. This rise parallels Nvidia’s similar valuation milestone and reflects a broader capital expenditure boom in AI, which, according to analysts, contributed more to recent U.S. economic growth than all consumer spending. Yet underlying this investor euphoria are growing concerns as much of the revenue is unprofitable or opaque, AI tools face public skepticism, and critics warn the boom increasingly resembles a speculative bubble rather than sustainable technological transformation.
On the one hand, Trump 2.0’s AI Action Plan is a political project that consolidates executive power, corporate interest, and territorial governance into a new infrastructure regime. By weaponizing permitting, subsidizing fossil-heavy energy systems, and overriding local authority, it remakes the state as an instrument of computational expansion. What was once environmental review, democratic planning, or educational policy is now repurposed to secure market share and geopolitical standing.
On the other hand, this is not a story of industrial revival. It is a highly speculative reordering of land, law, and legitimacy, driven by a fusion of state and cloud capital. The costs—environmental degradation, community displacement, regulatory erosion—are diffused across space and time. The rewards—access to compute, energy monopolies, infrastructure rents—are concentrated in the hands of a few. Yet, if the boom turns bust, expect the bulk of consequences to be “democratically” distributed.
Stay tuned for Part III, which examines how state-level legislation and preemption further entrench this regime against resistance—and Part IV, which explores the geopolitics of computing power between the U.S. and China.
Also, check out the People’s AI Action Plan—a broad coalition-backed initiative calling for democratic oversight and public-interest safeguards in AI development, aiming to counter corporate-driven agendas and ensure technology serves workers, communities, and the environment.
Executive Orders Referenced:
“Accelerating Federal Permitting of Data Center Infrastructure.” The White House. July 23, 2025. https://www.whitehouse.gov/presidential-actions/2025/07/accelerating-federal-permitting-of-data-center-infrastructure/.
“Initial Rescissions Of Harmful Executive Orders And Actions.” The White House. January 20, 2025. https://www.whitehouse.gov/presidential-actions/2025/01/initial-rescissions-of-harmful-executive-orders-and-actions/.
“Declaring a National Energy Emergency.” The White House. January 21, 2025. https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-energy-emergency/.
“Removing Barriers to American Leadership in Artificial Intelligence.” The White House. January 23, 2025. https://www.whitehouse.gov/presidential-actions/2025/01/removing-barriers-to-american-leadership-in-artificial-intelligence/.
“Unleashing Prosperity Through Deregulation.” The White House. January 31, 2025. https://www.whitehouse.gov/presidential-actions/2025/01/unleashing-prosperity-through-deregulation/.
“Restoring Common Sense to Federal Procurement.” The White House. April 15, 2025. https://www.whitehouse.gov/presidential-actions/2025/04/restoring-common-sense-to-federal-procurement/.
“Advancing Artificial Intelligence Education for American Youth.” The White House. April 23, 2025. https://www.whitehouse.gov/presidential-actions/2025/04/advancing-artificial-intelligence-education-for-american-youth/.
“Accelerating Federal Permitting of Data Center Infrastructure.” The White House. July 23, 2025. https://www.whitehouse.gov/presidential-actions/2025/07/accelerating-federal-permitting-of-data-center-infrastructure/.
“Promoting The Export of the American AI Technology Stack.” The White House. July 23, 2025. https://www.whitehouse.gov/presidential-actions/2025/07/promoting-the-export-of-the-american-ai-technology-stack/.