AI sector frets that environmental permitting hinders power generation growth

Microsoft and other artificial intelligence business leaders are seeking environmental permitting reforms from the Trump administration to speed up the addition of new power generation resources they say the sector needs.

During a May 8 Senate hearing, Microsoft President Brad Smith said the company's top concern was reducing the time it takes to complete the US Army Corps of Engineers' permitting requirements for wetlands.

"The number one challenge in the United States when it comes to permitting [new electricity infrastructure], interestingly enough, is not local, is not state, it is the federal wetlands permit that is administered by the Army Corps of Engineers," Smith told the Senate Commerce, Science, and Transportation Committee.

He said state and local permits can be completed in under a year, but the wetlands permit is taking up to two years to complete.

Both the previous Biden administration and current Trump administration have focused on this, Smith said, adding, "But if we could just solve that, we could accelerate a lot in this country."

Smith said Microsoft invests more than many of its peers "to bring more electricity generation onto the grid," and to supply its data centers. He said the company has "more permitting applications in more countries than possibly any other company on the planet."

Projects in over 40 countries

Currently, Microsoft has 872 applications outstanding in more than 40 countries, he said.

Michael Intrator, co-founder and CEO of the AI infrastructure company CoreWeave, also said permitting for energy infrastructure is of increasing concern for moving more AI computing capacity onto the grid.

Intrator said his company is increasingly focused on getting "access to power at the size and scale" required to build the largest data centers in the country.

He noted the $500 billion Stargate AI infrastructure project announced in January, led by OpenAI and SoftBank, with technology partners including Microsoft, NVIDIA and Oracle. Its first site, in Abilene, Texas, may require as much as 1.2 GW.

"It's tough" to gain access to that much power, Intrator said. "And it will get harder as we move through time, because the existing infrastructure that does have elasticity is going to be consumed. And once that is consumed, you're going to get down to a kind of first principle [of] 'how do we get power online now?'"

Intrator said that it "is really going to be challenging within the regulatory environment as it is currently configured."

In his prepared remarks, he said permitting times needed to be streamlined and the regulatory patchwork reduced to meet the industry's needs. "The lack of regulatory clarity can deter investment and slow down the innovation cycle," Intrator said.

'Hard to overstate importance'

OpenAI CEO Sam Altman said it is "hard to overstate the importance of energy here."

"Eventually, chips and network gear will be made by robots, and we'll make that very efficient, and we'll make that cheaper and cheaper. But an electron is an electron," Altman told the committee. "Eventually, the cost of AI will converge to the cost of energy, and how much you have -- the abundance of it -- will be limited by the abundance of energy."

Senator Eric Schmitt, a Missouri Republican, asked what the single best investment by the federal government would be to advance AI.

"I can't think of anything more important than energy," Altman said. "Energy, I think, is where this ends up."

Smith's and Intrator's comments were also in response to the senator's line of questioning on energy.

Later, Senator Ed Markey, a Massachusetts Democrat, asked if Altman would support legislation he introduced to measure the environmental impact of AI and data centers, given the large amounts of water and energy the industry would use.

Altman responded by saying some level of measuring may be helpful, but the conversation on the environmental impacts of AI and data centers, the "challenges and benefits, has gotten somewhat out of whack."

Altman said the tech sector has been trying to address "climate and environmental challenges unsuccessfully ... and I think we need help." The US government should address the environmental impacts of AI, Altman said, and use AI to help do it.