The executive order, the military authority, and the ratepayer scam behind the AI infrastructure boom
AI data centers are being treated like military projects when it comes to permits, environmental review, and federal land – and like private businesses when it comes to who collects the profits.
So I guess we get the worst of both worlds.
Back in July of last year, Trump signed an executive order that invented a brand new category called “Qualifying Projects” – basically any AI data center over 100 megawatts or $500 million in capital. Once a project gets that label, it becomes critical national security infrastructure – meaning the rules everyone else has to follow stop applying.
Environmental review – the federal process that normally requires you to study how a project affects air, water, and wildlife before you build it – gets waived. The Defense Department gets told to identify military land to lease out to private developers. Federal money kicks in – loans, grants, tax breaks.
Eight months later, that one executive order is the legal scaffolding for a half-dozen projects bigger than anything America has ever built.
Project Matador in the Texas Panhandle is the showpiece. It’s co-founded by Rick Perry – Trump’s former Energy Secretary – and Toby Neugebauer, son of a former GOP congressman from the Amarillo district where the project sits. The official name on the SEC filing – the legal name they use when raising money from investors – is “the President Donald J. Trump Advanced Energy and Intelligence Campus.”
17 gigawatts of generation. Four nuclear reactors, 93 gas turbines, solar panels, batteries – all on 7,570 acres leased from Texas Tech University for 99 years. At full capacity, it would draw more electricity than 1.2 million Texas homes use combined.
Texas regulators approved the gas turbines in February over local opposition. The Sierra Club found the air permit had no requirement to use the cleanest available pollution-control technology – and no required monitoring of particulate matter, the fine soot that gets in your lungs – in an area surrounded by cattle ranches and a Tyson meatpacking plant.
Hundreds of residents showed up to the December community meeting. The permits got approved anyway.
In Utah, it’s even worse.
Kevin O’Leary – the Shark Tank guy – is building a 9 gigawatt data center campus called Stratos in Box Elder County. Utah’s current total electricity use is 4 gigawatts. The whole state. His one project will consume more than twice that.
The vehicle for getting it approved is the Military Installation Development Authority – a state agency originally created to fast-track building on and around military bases – which Governor Spencer Cox is now using to route a Canadian businessman’s private AI data center around normal local zoning and review.
MIDA cut the energy use tax from the standard 6% down to 0.5% – basically eliminating it – and agreed to give back 80% of property tax revenue to O’Leary’s company.
Box Elder County commissioners said publicly they were blindsided. “We’re brought this in the last hour, and we’re expected to hurry,” the commission chair said. More than 80 residents packed the meeting carrying signs that read “people before profits” and “where’s the research.”
In Louisiana, Meta is building a $27 billion AI data center called Hyperion in Richland Parish – a community where 25% of residents live below the poverty line. The facility will consume roughly twice what New Orleans uses on a peak day.
To power it, Entergy – the local utility – is building 10 new gas-fired plants. That’s 7,400 megawatts of new generation – more than half of all power Entergy currently produces statewide – plus a $550 million transmission line to carry the power to Meta.
The cost gets spread across 1.1 million Entergy customers. Meaning every regular person who pays an electric bill in their service area subsidizes Meta’s AI factory.
The 15-year contract with Meta is shorter than the 30 to 40 year operational life of the gas plants. So when Meta walks away in 2041, ratepayers will still be paying for the plants for another 15 to 25 years.
Residents already report rust-colored tap water, blackouts, a 600% increase in vehicle crashes from construction trucks, and rents climbing as construction workers price out the locals.
Lisa Hopkins – who lives across the street from the site – told CBS her family’s fuel cost on her power bill is already up $13 a month. She bought her house two years ago.
Look at what these three projects share. Private company, public subsidy. Tax breaks routed through a state authority – sometimes literally a military one – that exists to expedite construction. Permits approved over local opposition under national security framing. Power either built behind the meter – meaning off-grid, paid for by the company – or paid for by ratepayers who never agreed to it.
Environmental review either skipped, accelerated, or watered down. Local government either bypassed entirely or told about the project a week before they’re expected to approve it. Tenants nobody can name. Jobs that mostly turn out to be temporary construction work.
The public-facing story is always “we have to do this to beat China.” The actual structure is “we have to do this to enrich a small number of well-connected people while the rest of you pay for the gas plants.”
“National security” has become the magic phrase that turns any infrastructure project into a permitted one. You don’t need Congress. You don’t need an environmental review. You don’t need local approval. You don’t even need to tell the county commissioners what you’re building until the contract is on their desk.
The same pattern that built Trump’s ballroom on top of the East Wing – private donors get access, public gets the bill, oversight gets routed around – is now being applied to the entire physical infrastructure of American AI.
SOURCES:
White House: Accelerating Federal Permitting of Data Center Infrastructure
Sierra Club Texas: Project Matador – Trump AI Data Center
E&E News: Texas Approves Data Center Behemoth’s Massive Gas Power Play
Distilled Earth: The World’s Largest Planned Data Center
Tom’s Hardware: Kevin O’Leary’s 9GW Utah Data Center Campus Approved
KSL: Cox Backs Box Elder County Data Center Proposal
Deseret News: Shark Tank’s Kevin O’Leary Data Center Utah
CBS News: Meta AI Data Center Richland Parish Louisiana
Fortune: Inside Meta’s Chaotic AI Boomtown in Rural Louisiana
Futurism: Meta Hyperion Data Center Louisiana
All4Energy: Meta Data Center to Cause Entergy Bill Increase