DOE Accelerates Data Center Expansion on Federal Land—Key Sites Identified in 4 States

In a major step toward meeting the surging infrastructure needs of artificial intelligence, the U.S. Department of Energy (DOE) has unveiled a plan to develop large-scale data centers on federal land. This initiative aims to fast-track capacity growth in locations already supported by robust energy infrastructure, streamlining development timelines and catering to both national research priorities and private-sector demand.

Why These Locations Matter

In April 2025, DOE identified 16 federal sites suitable for rapid data center construction, focusing on areas with existing power infrastructure and strategic value for AI and high-performance computing. After industry and public consultation—yielding over 300 responses to a Request for Information (RFI)—the agency moved quickly to narrow its list to four initial development sites:

Idaho National Laboratory (Idaho)
Oak Ridge Reservation (Tennessee)
Paducah Gaseous Diffusion Plant (Kentucky)
Savannah River Site (South Carolina)

These states represent critical nodes for future AI-driven workloads, combining available land, transmission capacity, and proximity to advanced research facilities.

Fast-Tracked Permitting for Energy-Intensive AI Workloads

In response to recent executive orders, DOE has committed to accelerated permitting, shortening environmental review timelines and removing clean energy stipulations that often slow project approvals. This policy shift could enable data center campuses to come online within two years, aligning with the growing urgency to deploy AI-ready infrastructure.

At the recent "Winning the AI Race" summit, U.S. Secretary of Energy Chris Wright emphasized the government’s role in enabling private capital to drive AI infrastructure growth:

“The main thing I view the department and the government as a whole is to get out of the way and to enable private businesses and enterprises to bring the hundreds of billions of dollars of capital investment that will be needed to lead in AI.”

Wright also reinforced the strategic value of the chosen sites:

“These sites are uniquely positioned to host data centers as well as power generation to bolster grid reliability, strengthen our national security, and reduce energy costs.”

What This Means for Investors

For institutional investors and global banks, the selection of these four sites highlights where capital deployment is most likely to accelerate over the next two years. Idaho and Tennessee already support advanced nuclear and clean energy projects, while Kentucky and South Carolina offer robust industrial power infrastructure. Because these are federally backed developments with expedited permitting, they represent some of the fastest time-to-market AI data center opportunities in the U.S. As energy demand surges, these locations are poised to become hubs for new on-site power generation—from nuclear to natural gas—creating compelling, long-term prospects for infrastructure funds, REITs, and institutional capital.

Key opportunities for investors include:

Reducing risk exposure by co-locating near federally supported infrastructure and established energy assets.
Capturing upside from AI-driven power demand, particularly in regions benefiting from power purchase agreements tied to federal facilities.
Monitoring early-stage projects that may influence regional economic growth, property valuations, and long-term energy markets.

Aterio’s research team is actively monitoring permitting activity, power infrastructure expansion, and construction progress at these sites. By combining satellite imagery analysis with infrastructure datasets, we provide early signals to investors on project timelines and regional impacts.

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