Building for AI: The Next Wave of Infrastructure Investment

A network of wired connections.

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During our June edition of Little Nuggets of Tech and Telecom, Shane Tews, senior fellow at the American Enterprise Institute and president of Logan Strategies, examined the interdependent infrastructure stack powering AI deployment. They delved into some of the regulatory misalignments occurring across different regulatory agencies overseeing these interdependent layers. Panelists agreed that while broadband infrastructure continues to proliferate, it’s equally important that investments be made by the electric utility industry, in both generation and transmission infrastructure. Nuclear was highlighted as a possible source of electricity that might offset some of the AI-driven power demands.

Key Takeaways: 

  • Power, not broadband, is now the limiting factor to the proliferation of AI capabilities. Electricity has shifted from a simple input cost to a constraining resource, driving companies toward off-grid private networks and on-site generation.
  • Synchronization across regulatory regimes is the biggest failure point. The Federal Communications Commission (FCC), Federal Energy Regulatory Commission (FERC), and state/local regulators operate in silos, creating friction between telecom, energy, and data center deployment. Broader interagency coordination is critical.
  • National Environmental Policy Act (NEPA) reform could unlock spillover benefits across the entire stack. Environmental permitting streamlines not only data center siting but also broadband deployment and power infrastructure upgrades.
  • Local communities are increasingly resistant to data center development. Rather than fight this opposition, hyperscalers are launching PR campaigns to explain their environmental practices and moving projects to rural regions with fewer restrictions and more community support.
  • Hyperscalers building private broadband infrastructure could fragment investment in broadband infrastructure. The question remains whether they will be customers, competitors, or both, with the telecom providers.
  • Speed and engagement with policymakers are urgent. Without moving quickly to educate regulators and align expectations across sectors, fragmentation and delays will multiply. The next two to five-year window is critical for foundational policy alignment to ensure the levels of private investment at all levels of the infrastructure stack continue.

You can watch or listen to the entire conversation on our YouTube channel.