The Great AI Buildout: Trump’s Private-Sector Stimulus

At first glance, the recent AI boom may appear like a spontaneous eruption of technological exuberance, a kind of Silicon Valley gold rush, occurring naturally in the free market’s fertile soil. But this view omits a crucial causal chain. The unprecedented buildout of AI infrastructure in the United States, data centers, chips, energy projects, and backbone software, did not emerge from a policy vacuum. It is, instead, the result of deliberate executive action: President Donald Trump’s early 2025 decision to prioritize deregulation, energy abundance, and capital investment, and his appointment of David Sacks as AI and Crypto Czar, form the cornerstone of a framework that is now transforming the US economy at a velocity unseen since the postwar industrial expansion.

In the first half of 2025, AI-related capital expenditures contributed more to GDP growth than all consumer spending combined. That fact alone inverts the traditional economic model of the US, long driven by household consumption. Firms like Microsoft, Meta, Amazon, Alphabet, and Nvidia, the so-called “Magnificent Seven”, have poured over $100 billion in a single quarter into the infrastructure needed to power artificial intelligence, and that pace is only accelerating. If current trends persist, quarterly spending could easily double or even quadruple by the end of the year. This capital is not speculative froth. It is cement, copper, and silicon, planted into the ground in the form of massive data centers, electrical substations, and semiconductor foundries.

To contextualize this moment, one need only glance backwards. At the peak of the dot-com boom in the late 1990s, telecom infrastructure spending accounted for about 1.0% of GDP. Today, AI infrastructure investment already exceeds 1.2% of GDP, and that number is still rising. Paul Kedrosky, a leading investor and technology analyst, observes that we are now experiencing a larger capital outlay than during the internet buildout. The analogy is not merely quantitative. There is a historical symmetry at play. Just as Carnegie and Morgan financed steel, rail, and electricity in the late 19th century, today’s industrialists are reclaiming the same geography, literally.

In western Pennsylvania, an 89-acre former steel mill in Aliquippa is being converted into a power-hungry AI data center. Why? Because these sites are still wired into the old industrial grid, with easy access to reliable electricity, especially from fossil fuels and nuclear power. One might call it industrial reincarnation: the rebirth of America’s dormant steel cities as nexuses of computation. This historical continuity was not accidental. It was enabled.

In his first month in office, President Trump signed three executive orders aimed at expediting infrastructure projects by reforming long-standing environmental and permitting restrictions. By rewriting portions of NEPA (National Environmental Policy Act) review procedures, he cleared a legal path for AI infrastructure to be constructed within months rather than years. Sam Altman, CEO of OpenAI, publicly stated that permitting speed under Trump is what allowed his firm to avoid a crippling capacity shortage in Q2 of 2025. Elon Musk, meanwhile, spent over $7 billion to build Colossus, and is now spending more than $1 billion per month on AI infrastructure. Critics may deride these measures as reckless deregulation, but the effects are observable: AI companies have gone from concept to construction without the usual bureaucratic bottlenecks.

Further, the Trump administration shielded this buildout from global price shocks. In April 2025, the Treasury, under Secretary Scott Bessent, announced a targeted exemption from tariffs for critical AI inputs, GPUs, semiconductors, supercomputing hardware. This protection, while narrow, prevented cost spirals that would have rendered some billion-dollar projects economically infeasible. Combined with favorable tax treatment and accelerated depreciation schedules, the US became the most attractive jurisdiction for AI infrastructure investment in the world.

It was within this climate that David Sacks was appointed AI and Crypto Czar. Sacks, a PayPal veteran and outspoken critic of regulatory overreach, brought not only technical fluency but strategic vision. Under his stewardship, the White House unveiled the “America’s AI Action Plan,” a 90-point roadmap aimed at cementing American AI dominance. Among its achievements: streamlined permitting for GPU clusters, federal support for nuclear energy repowering, targeted R&D grants for open-source AI models, and a comprehensive export strategy for US-designed chips.

But why emphasize the role of policy? Because absent these changes, the boom would have withered on the vine. Under the previous administration, data center construction was increasingly choked by state-level permitting delays, energy constraints, and environmental lawsuits. Federal agencies slow-walked approvals, and AI firms reported multi-year delays for basic infrastructure. By contrast, within six months of Trump’s inauguration, over a dozen multi-gigawatt AI facilities had broken ground. Energy investment, once sluggish, roared to life. The Department of Energy, aligned with EPA Administrator Lee Zeldin and Interior Secretary Doug Burgum, issued new licenses for natural gas and nuclear facilities tailored to power AI workloads. It was a harmonized push, not piecemeal deregulation.

The result has been an economy buoyed by private-sector stimulus. One economic estimate calculated that if AI infrastructure investment were excluded from the national accounts, Q1 GDP growth in 2025 would have been negative 2.1%. Instead, we witnessed robust expansion, even as other sectors flagged under high interest rates. AI spending has become, in effect, a new form of industrial policy, not by subsidy, but by subtraction: the removal of regulatory friction and the restoration of economic dynamism.

The geopolitical implications are just as profound. The global race for AI dominance is no longer a Cold War metaphor. China, through its Ministry of Industry and Information Technology (MIIT), has spent the last five years building its own domestic AI stack, including chip design, data centers, and sovereign LLMs. What makes the US response under Trump distinctive is its reliance on decentralized private capital rather than centralized planning. But this decentralized model required permission to act. By lifting barriers, Trump shifted the frontier outward, inviting private capital to fill the void.

Indeed, the starkest contrast is this: in China, AI infrastructure is a government program. In the US, it is a byproduct of deregulated ambition. One needs only examine Nvidia’s market valuation, which crossed $4 trillion in mid-2025. Or consider that TSMC, the world’s leading chip fabricator, saw its Q1 profit surge 57% largely on the back of US demand. This is not passive economic activity. It is pulled into existence by the gravitational force of coherent policy.

Some critics claim this boom was inevitable, that technological momentum would have delivered these results regardless of who sat in the Oval Office. But that is a metaphysical argument masquerading as economics. As in all counterfactuals, we must imagine a world in which Trump did not win the 2024 election. In that world, permitting delays persist, tariffs depress investment, energy remains scarce, and GDP slows. In this world, the one we inhabit, GDP rises, energy flows, and America reclaims its role as a builder of great things.

It is tempting to view this moment as a resurgence of techno-optimism. That would be correct, but incomplete. What we are witnessing is the reemergence of a distinctly American model of innovation, one in which government steps back, energy surges forward, and private actors race to build. For the first time in decades, old steel towns are humming with new machines, not because of nostalgia, but because the physics of power and policy have aligned.

Trump didn’t just promise to make America great again. He laid the procedural and legislative groundwork for it. The AI boom is not a glitch in the system. It is the product of design. Of course there is more that Congress can do to ensure the AI boom continues here in America including a 10-year grace period for AI companies:

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