Trump Announces $20 Billion Data Center Plan for the US

New Investment in US Data Centers Announced

Donald Trump, the President-elect, has revealed that Hussain Sajwani, a billionaire businessman from the United Arab Emirates and the founder of DAMAC Properties, intends to invest $20 billion in the construction of new data centers throughout the United States.

Initial Investment Locations

According to Trump’s statement during a press conference held at his Mar-a-Lago residence on Tuesday, the initial phase of this multi-year investment will focus on data centers located in Arizona, Illinois, Indiana, Louisiana, Michigan, Ohio, Oklahoma, and Texas. These facilities are designed to primarily support the growing demands of AI and cloud technologies.

“We have anticipated the opportunity to expand our investments within the U.S. for several years,” Sajwani stated. “Our aim is to invest $20 billion, with the potential for even greater contributions.”

Limited Details Released

The press conference did not provide any additional specifics regarding the details of this substantial investment.

Past Investment Pledges and Potential Risks

It is crucial to acknowledge that the realization of this deal remains uncertain. History demonstrates that similar investment commitments have previously failed to materialize. For example, in 2017, a $10 billion investment by Taiwanese manufacturer Foxconn near Milwaukee was announced by then-President Trump and Wisconsin’s Governor Scott Walker.

However, within a short period, Foxconn began to reduce the scope of its plans. Reports from Wisconsin Public Radio indicated that by late 2022, the company had created approximately 1,000 jobs – significantly less than the promised 13,000 – and had only spent $1 billion by early 2023.

Trump’s Stance on the CHIPS Act

President Trump has consistently voiced criticism of the CHIPS Act, a key legislative achievement of the current Biden administration. This Act allocates $39 billion in grants, alongside 25% tax credits and additional loans, to revitalize American semiconductor manufacturing, which has largely shifted to Asia over recent decades.

Trump, along with other Republican leaders like Mike Johnson (R-LA), recently re-elected as House Speaker, have suggested the possibility of repealing the CHIPS Act. During an interview with Joe Rogan last October, Trump accused Taiwan of diverting “our chip business” and advocated for tariffs on semiconductor imports.

Impact of the CHIPS Act

The CHIPS Act, which garnered bipartisan support in 2022, has successfully attracted investment from all five of the world’s leading advanced chipmakers. According to Bloomberg, companies have committed to spending more than ten times the Act’s total grant allocation.

Growing Need for Data Center Infrastructure

Numerous technology leaders have emphasized the necessity for increased investment in data center infrastructure, particularly given the rapid expansion of the AI industry. The development and operation of AI systems at scale necessitate substantial computing resources.

Microsoft’s Investment and Perspective

Microsoft, anticipating an $80 billion expenditure on AI data centers, recently highlighted the importance of “new partnerships founded on large-scale infrastructure investments” in a blog post authored by President Brad Smith.

Smith wrote, “The United States is well-positioned to lead in this new technological era, especially by reinforcing its strengths and fostering effective international collaborations.” He further added that the incoming administration could build upon the foundations established during President Trump’s initial term.

OpenAI CEO’s View on Future Investments

In a recent interview with Bloomberg, OpenAI CEO Sam Altman expressed that the incoming Trump administration has “a real opportunity” to implement a more effective strategy than the CHIPS Act.

“I don’t believe the Chips Act has been as successful as we had hoped,” Altman stated. “I strongly concur with President Trump’s assessment that the difficulty of constructing facilities in the United States – including power plants and data centers – is considerable. While I recognize the accumulation of bureaucratic processes, it ultimately hinders the nation’s progress.”