The White House Cuts a Deal on Data Center Energy as Chip Export Rules Stall

~1,950 words | ~8 min read

Good afternoon,

This was a week where the politics of AI infrastructure moved from background noise to center stage. President Trump hosted the CEOs of Google, Microsoft, Meta, Oracle, xAI, OpenAI, and Amazon at the White House to sign a voluntary pledge that their data centers won’t raise electricity prices for households. Progressives are pushing a data center moratorium, Commerce is drafting AI chip export rules the White House won’t support, and billions in new capital flowed into space, semiconductors, and energy infrastructure. The through-line: AI infrastructure is now a political, regulatory, and capital markets event—and the legal work is stacking up across every dimension.

 Now, on to what matters for your practice today.

Data Centers: The Political Reckoning

The gist of it: Tech companies pledge to cover their own energy costs while lawmakers on both sides weigh whether to slow data center construction altogether.

Google, Microsoft, Meta, Oracle, xAI, OpenAI, and Amazon signed the Ratepayer Protection Pledge at the White House, committing to fund new power capacity for their data centers and pay all infrastructure upgrade costs. The pledge is voluntary and not legally binding.

Republican legislators in Missouri, Ohio, and Oklahoma have proposed pausing or banning data center construction. Gov. Ron DeSantis has backed regulatory bills in Florida. Sen. Bernie Sanders is preparing moratorium legislation, supported by Rep. Pramila Jayapal and Rep. Maxwell Frost. Sen. John Fetterman publicly rejected the moratorium, calling it a surrender to China.

A POLITICO poll found 50% of voters support building more data centers, but support drops to 36% when the facility is within three miles of respondents’ homes. New York has proposed a three-year moratorium on energy-intensive facilities; Denver’s Mayor Mike Johnston is finalizing a one-year review plan. Jeff Jakubiak, energy regulation partner at Vinson & Elkins, told Semafor the pledge will likely result in more generation capacity than would otherwise have been built.

Where the work sits: State and local energy regulation, land use and zoning, rate structure design, and legislative drafting around moratorium proposals all generate advisory mandates. Firms with energy regulatory, government affairs, and real estate practices are positioned to advise hyperscalers on permitting and utilities restructuring rate agreements.

The Grid: Transmission, Permitting, and the Energy Mix

The gist of it: The energy system is being rebuilt to serve AI—and the bottleneck is not resources but the ability to build.

John Arnold framed the data center energy challenge as a competitiveness problem: AI infrastructure companies are less price-sensitive and more speed-sensitive than any prior energy consumer. Demand visibility is strong through 2030, but power infrastructure takes 10–15 years to permit and build against demand projections that become unreliable after five.

•        PJM Interconnection approved ~$11.8 billion in transmission projects, including a $1.7 billion, 221-mile 765 kV line in Pennsylvania and a $1.1 billion, 300-mile 765 kV build in Ohio.

•        In Texas, ERCOT’s 2024 Regional Transmission Plan includes a 765 kV Strategic Transmission Expansion Plan (STEP) to overlay a high-voltage backbone on the existing grid.

•        Lancium’s Panhandle Plan envisions ~1,000 miles of 765 kV lines in north Texas to support 24 GW of data center load, with Brattle Group analysis showing cost-neutral impact on other ERCOT customers.

•        Google, Xcel Energy, and Form Energy announced a Minnesota deal bringing 1,400 MW of wind, 200 MW of solar, and 300 MW of iron-air battery storage under a Clean Energy Accelerator Charge tariff that shifts all costs to Google.

On generation, Arnold pointed to advanced geothermal as the most compelling energy investment tied to the data center buildout—baseload, low-emissions, and leveraging existing oil and gas workforce. Nuclear remains promising but 10–15 years out at scale. Former Secretary of State John Kerry wrote that nuclear is now a necessity, but cautioned that too many projects remain announcements rather than deployments.

Where the work sits: Transmission siting and permitting, energy project finance, power purchase agreements, tariff design, utility rate cases, and CHIPS Act tax credit structuring are driving work. Infrastructure lawyers, project finance teams, and energy regulatory specialists will see sustained demand as grid operators greenlight multi-billion-dollar builds.

AI Chips: Export Rules Stall, Semiconductor M&A Accelerates

The gist of it: The White House rejects Biden-era chip export restrictions while supply chain position becomes the most valuable asset in semiconductor dealmaking.

The Commerce Department has been drafting rules requiring permits for all AI chip exports, with tiered review based on order size. Orders exceeding 200,000 Nvidia chips in a single country would trigger government-to-government negotiation. The 129-page draft was sent to OMB for interagency review last week.

The White House pushed back. Commerce issued a statement saying it would not enact restrictions resembling Biden-era policies, calling the prior approach “burdensome, overreaching, and disastrous.” AI czar David Sacks has argued that making American chips available globally is essential to prevent Chinese competitors from gaining ground.

In semiconductor M&A, deal volume surged from $2.7 billion in 2023 to $45 billion in 2024, and the pace has carried into 2026. AI has made supply chain position—wafer capacity, packaging access, substrate control—the primary valuation input. AI-related memory is projected to consume nearly 20% of global DRAM wafer output in 2026. Key deals:

•        ASE Technology acquired a facility from WIN Semiconductors for NT$6.5 billion to expand CoWoS and advanced packaging capacity.

•        Onsemi’s $115 million acquisition of Qorvo’s SiC JFET business strengthened its silicon carbide supply chain for AI data center power.

•        NXP’s $307 million purchase of Kinara.ai added edge AI inference processing.

Deloitte projects global chip sales will reach $975 billion in 2026, with generative AI accounting for ~$500 billion. The CHIPS Act’s 25% Advanced Manufacturing Investment Tax Credit is steering capital toward onshore production, while export controls create a dual-track market between Western-aligned and China-exposed firms.

Where the work sits: Semiconductor M&A diligence now requires mapping geographic supply chain exposure as a primary workstream. Export control compliance, CFIUS review, CHIPS Act incentive structuring, and cross-border technology licensing are generating sustained demand for trade, corporate, and regulatory counsel.

Space: Capital, Defense, and Industrial Policy

The gist of it: Over $1.7 billion in new funding hit the space sector this week as defense demand, commercial stations, and AI-driven data applications draw investors.

•        Sierra Space raised $550 million in a Series C led by LuminArx Capital at an $8 billion valuation. New CEO Dan Jablonsky is expanding from the Dream Chaser spaceplane into defense, including missile-tracking satellite contracts.

•        Vast raised $500 million ($300 million equity, $200 million debt) led by Balerion Space Ventures to build its Haven commercial space stations, with Haven-1 targeting 2027.

•        Telus agreed to take a stake in AST SpaceMobile and invest in ground infrastructure for its direct-to-smartphone network. AST plans 45+ BlueBird Block 2 satellites by end of 2026.

•        SPACs are making a comeback in the space sector, with investors arguing the industry is now mature enough to support the vehicle.

•        Seraphim Space closed its second fund above its $100 million target, noting a shift toward AI and machine learning applied to satellite-derived data. Boeing demonstrated that large language models can run on space-grade satellite hardware for onboard telemetry processing.

•        The U.K. announced a £500 million space funding package. China designated aerospace as an “emerging pillar industry” in its draft national economic plan, signaling a push beyond state programs toward a broader industrial ecosystem.

•        The Pentagon committed $150 million to Mare Liberum, a maritime tech VC fund, through the Office of Strategic Capital. The DoD has selected 23 firms from over 386 applicants.

Where the work sits: National security space contracts, SPAC structuring, venture fund formation with government LP capital, satellite spectrum licensing, and defense procurement advisory are active mandates. Firms with government contracts, project finance, and international trade capabilities are positioned as capital scales and dual-use applications multiply.

Physical AI, Robotics, and Brain-Computer Interfaces

The gist of it: AI is moving from software into machines that interact with the real world, and the capital is following.

The physical AI market—humanoid robots, autonomous vehicles, drones, factory automation—is projected to reach $500 billion to $1.4 trillion by 2035.

•        Unitree plans to ship 10,000–20,000 G1 robots in 2026 at ~$13,500. Tesla targets scaling Optimus at $20,000–$30,000. Nvidia’s Jetson Thor chips enable on-device AI processing.

•        Science Corporation, founded by Neuralink co-founder Max Hodak, raised $230 million at a $1.5 billion valuation. Investors include Lightspeed, Khosla Ventures, Y Combinator, and IQT. Its PRIMA retinal implant showed 80% of trial patients regained meaningful visual acuity. EU approval is expected mid-2026, with Germany likely the first market.

Where the work sits: Product liability frameworks for autonomous systems, medical device regulatory pathways (FDA, CE marking), IP protection for embodied AI, defense procurement for dual-use robotics, and venture financing for hardware-intensive startups are generating mandates across litigation, regulatory, and transactional practices.

Capital Flows: Who’s Buying, Who’s Selling, Who’s Cutting

The gist of it: AI infrastructure dealmaking is accelerating across energy, cooling, and compute—but not everyone is expanding.

•        KKR is targeting a 10x return on a potential $3 billion+ sale of CoolIT Systems, a data center liquid cooling company it acquired in 2023 for $270 million. Mubadala holds a minority stake.

•        Global Infrastructure Partners (owned by BlackRock) and EQT struck a $33 billion deal to take utility group AES Corporation private, adding renewable power generation to meet data center electricity demand.

•        Prior data center infrastructure deals set the benchmark: Eaton paid $9.5 billion for Boyd Corporation’s thermal business; Vertiv bought PurgeRite for ~$1 billion.

•        Oracle is planning to cut thousands of employees this month, with some roles eliminated due to AI. The 160,000-person firm’s aggressive data center spending has pressured cash holdings.

•        OpenAI and Oracle will not expand their Abilene, Texas data center beyond 1.2 GW. OpenAI prefers to wait for Nvidia’s next-generation Vera Rubin chips. Nvidia is helping Crusoe lease the remaining site to Meta.

•        Abu Dhabi’s Judan ($237 billion holding company led by Sheikh Tahnoon bin Zayed) is acquiring 50.1% of Alpha Wave Global, a Miami-based asset manager invested in Anthropic, OpenAI, and SpaceX. Separately, Qatar Investment Authority bought into AES.

Where the work sits: M&A execution, PE exit advisory, take-private structuring, workforce reduction planning (WARN Act, severance), sovereign wealth fund cross-border investments (CFIUS), and data center lease negotiations are generating mandates across corporate, finance, and employment practices.

Influencers

The people, companies, and organizations driving this week’s developments: President Trump and the White House on data center energy policy; John Arnold on the energy-AI nexus; David Sacks shaping chip export posture; Sen. Bernie Sanders and Rep. Pramila Jayapal on the moratorium; Sen. John Fetterman opposing it; Secretary Howard Lutnick advancing draft chip rules; Sheikh Tahnoon bin Zayed expanding Abu Dhabi’s AI footprint through Judan; John Kerry calling for nuclear execution; Max Hodak at Science Corp; KKR positioning for a major AI infrastructure exit; Lancium and Brattle Group designing the Panhandle Plan; and the Pentagon’s Office of Strategic Capital expanding its venture footprint.

Origination Pipeline

The next wave of legal mandates will be driven by several converging forces. The Commerce Department’s chip export rule—now in interagency review at OMB with a deadline next Thursday—will define the compliance architecture for every company selling AI chips globally. State-level data center legislation in New York, Florida, Ohio, and Denver will generate zoning, permitting, and utility rate work. The $33 billion AES take-private, KKR’s CoolIT exit, and sovereign wealth dealmaking from Judan and QIA will keep M&A and CFIUS teams busy through Q2. The CHIPS Act’s 25% manufacturing tax credit is accelerating onshore semiconductor investment. In space, over $1.7 billion in new funding means venture formation, government contracts, and international partnerships will continue generating deal flow. And as physical AI companies like Science Corp approach commercialization, FDA and EU regulatory pathways, product liability, and IP protection will open new mandates at the med-tech intersection.

Disclaimer: BigLaw Street analyzes and draws on publicly available information from leading business and legal publications, firm announcements, press releases, and public regulatory and corporate filings.

That’s the rundown. See you next week where law meets the markets.

-The Big Law Markets Team