U.S. AI Policy in Action: Understanding the Effects on American Production Lines
The White House announced the "AI Action Plan" on July 23, 2025, with the aim of increasing domestic capacity for artificial intelligence (AI) development and deployment. The plan, accompanied by three executive orders, proposes several adjustments that have significant implications for U.S. supply chains.
Data Center Expansion
The federal government is making land available to facilitate large-scale construction of AI data centers and supporting power infrastructure. The administration is also committed to accelerating permitting processes by cutting regulatory burdens and environmental review obstacles. The emphasis is on ensuring data center construction incorporates domestic manufacturing, particularly semiconductors and secure hardware and software, to avoid reliance on foreign adversaries. Financial support for qualifying data center projects will be offered through loans, grants, tax incentives, and offtake agreements.
Regulatory Changes
The Executive Order on “Accelerating Federal Permitting of Data Center Infrastructure” revoked a prior order aimed at a more aggressive stance toward easing regulations related to AI infrastructure development. The regulatory changes aim to reduce bureaucratic delays and environmental concerns that could hinder rapid AI deployment, thus directly affecting supply chains by enabling faster construction and operation of critical infrastructure. Efforts also include bolstering critical infrastructure cybersecurity.
Changes to Export Controls and International Positioning
The AI Action Plan seeks to strengthen U.S. leadership in AI globally by promoting exports of American AI technology. This involves calibrating export controls to ensure competitiveness without compromising national security. The export orientation can create new supply chain opportunities for American producers of AI components and software, while maintaining secure supply chains free from foreign adversarial influence.
Labor and Workforce Development
The plan allocates resources and mandates initiatives to train and expand the U.S. workforce specifically for AI infrastructure development and maintenance. This includes skilled labor for data centers, manufacturing of semiconductors, and maintenance of AI production technologies. Workforce development is linked directly to the industrial expansion envisioned, meaning supply chain actors in manufacturing, construction, and IT services will require growth and retraining to meet AI demands.
The implementation of the U.S. "AI Action Plan" and related executive orders have several specific implications for U.S. supply chains concentrated in four key areas: data center expansion, regulatory modifications, changes to export controls and international positioning, and labor and workforce development. These policies collectively aim to accelerate the build-out of AI infrastructure, strengthen domestic manufacturing and secure supply chains, ensure regulatory environments support rapid deployment, and develop skilled labor capabilities crucial for maintaining U.S. leadership in AI technology.
| Area | Implications | |-------------------------|--------------------------------------------------------------------------------------------------------------------------------| | Data Center Expansion | Federal land use; faster permitting; financial incentives; domestic manufacturing focus; infrastructure cybersecurity | | Regulatory Changes | Deregulation and expedited environmental reviews; removal of bureaucratic hurdles; emphasis on cybersecurity | | Export Controls | Export promotion balanced with national security; secure supply chains avoiding foreign adversary tech; global competitiveness | | Labor & Workforce | Training programs for AI infrastructure skills; support for semiconductor/manufacturing labor; mitigation of workforce shortages |
- The federal government's strategy for data center expansion includes making available land for construction, reducing regulatory burdens, accelerating permitting processes, and offering financial support to ensure domestic manufacturing of semiconductors and secure hardware and software.
- The regulatory changes, initiated by the Executive Order on “Accelerating Federal Permitting of Data Center Infrastructure,” aim to reduce bureaucratic delays and environmental concerns that could hinder rapid AI deployment, with a focus on cybersecurity.
- The AI Action Plan's export orientation seeks to promote American AI technology exports, calibrate export controls to maintain national security, create new supply chain opportunities for domestic producers, and ensure competitiveness on a global scale.
- The plan also focuses on labor and workforce development, providing resources for training and expanding the U.S. workforce in AI infrastructure development, manufacturing of semiconductors, and maintenance of AI production technologies.
