US Must Lead AI Data Center Buildout to Secure National Security, Analysts Warn

The United States risks a national security disaster and economic disadvantage if it does not proactively lead the buildout of artificial intelligence (AI) data centers, according to analyses of the current landscape. The ongoing debate surrounding AI data centers highlights a failure to learn from past offshoring mistakes, potentially creating dependencies that would be difficult to reverse.

Whether or not AI data centers are constructed within the U.S., AI technology is set to remain a dominant force. The choice, therefore, lies between shaping AI's trajectory by embracing domestic data center development or ceding this crucial advantage to other nations. Competitors like China are investing heavily, with nearly $300 billion in data center investments announced through 2030, in addition to private sector spending. India offers foreign cloud operators a 20-year tax holiday, and the Republic of Korea is providing regulatory relief, contrasting with moratorium calls in parts of the U.S.

The national security implications of hosting AI data centers extend beyond mere competition with China. If the U.S. does not build these facilities domestically, it risks losing control over the data, compute power, and intellectual property that fuel innovation, protect privacy, and ensure sovereignty. This also forfeits the ability to set security standards for this critical infrastructure.

Data serves as the fuel for AI innovation, requiring substantial amounts to be processed through AI data centers. Careful handling of this data is paramount, particularly for privacy reasons, and it should be regarded as a national asset. Adversaries may exploit data routed through AI data centers to advance their own AI ambitions, potentially through espionage or by accelerating their AI models, as has been observed with China's cyber activities and adversarial distillation techniques. Insecure or compromised data can degrade the performance of AI models and expose sensitive information.

America currently holds a significant strategic advantage by hosting 75% of the world's high-performance compute power. Strong export controls on advanced compute enable the U.S. to maintain its lead over adversaries and collaborate with allies to shape AI's development. The CHIPS and Science Act aims to bolster domestic semiconductor production, but the destination of these manufactured chips is critical, with many currently going to AI data centers.

By offshoring AI data centers, the accompanying chips and potentially supplier businesses could follow, negatively impacting U.S. resiliency and the economy, which has geared towards reindustrializing semiconductor manufacturing. While U.S. export controls have hindered China's access to leading-edge semiconductors, housing these chips overseas could create loopholes for remote access, facilitating China's AI development.

Reliance on overseas AI data centers could also prove detrimental during global crises, as other nations, not the U.S., would dictate where compute capacity is allocated. This could result in the U.S. receiving insufficient or slow access to critical resources. With compute capacity already constrained and demand projected to rise, having AI data centers within the U.S. ensures prioritized access during crises and supports the innovation economy and technical workforce.

AI intellectual property (IP), including AI models and weights, is a key target for theft, particularly by China, which has engaged in IP theft to compete with American frontier models. Offshoring AI data centers is akin to handing over IP, which can be leveraged for market dominance and military advantage. Although the U.S. currently hosts the most AI data centers, this lead is not guaranteed, especially as a significant portion of announced projects have yet to begin construction.

To secure U.S. interests, three immediate actions are proposed. First, leveraging federal land for rapid AI data center buildout, building on executive orders to streamline permitting. This approach frames AI as a common good and places responsibility on the U.S. government to scale AI development. Second, the Commerce Department should utilize the AI Exports Program to promote secure, global AI data center development with allies. This program can serve as an enforcement mechanism for standardizing safe and secure AI data center operations overseas, mitigating risks from insider threats, natural disasters, and interdependency failures.

Third, space must be reserved for AI data center improvements. While avoiding stalled development, the pace of buildout should be assessed to ensure continued innovation in powering AI and improving models that require less energy. This allows for breakthroughs in AI efficiency and flexibility in adaptation.

The U.S. stands at a pivotal moment to either lead or falter in the AI industrial revolution, which is intrinsically linked to its national security interests. Embracing the domestic buildout of AI data centers is presented as the path to leadership.