The AI Race Is Dissolving the Rules Washington Owns

Last September the Environmental Protection Agency loosened an air-pollution rule so that companies could pour the concrete pads for new industrial sites before their permits came through. The rule it loosened is about pollution. The reason it gave was the need to win the "AI technological arms race against China" ^[1]. An air rule, justified by a chip race. And the move required no one's sign-off but the agency's own: the office that wrote the rule was the office that waived it. That was the small end. Two months earlier the White House had published "Winning the Race: America's AI Action Plan," a document whose title is its argument. It directed agencies to stop requiring full environmental review under the National Environmental Policy Act, the country's foundational environmental review law, for data centers; to cut the impact statements that review produces; and to withdraw the official guidance on how agencies should weigh greenhouse gases ^[2][3]. The review law belongs to Congress. The machinery that carries it out belongs to the executive branch, and the machinery is what the plan hollowed. The stakes rose from there. In April the president designated data centers critical national-security infrastructure by executive order, the one instrument he signs alone, declaring that "America is going to win it" ^[4]. Last month the EPA came back with wider tools: it exempted the "islanded" power plants that serve data centers, dedicated units off the public grid, from the Clean Air Act's acid-rain program, and proposed that smaller pollution sources skip public notice and comment entirely, to speed construction the agency called "needed for generative AI" ^[5]. Notice and comment, the window in which anyone affected can object before a rule takes effect, is the agency's own procedure. The agency took it back. The pattern also has a front door. The Clean Air Act lets the president exempt individual companies from its rules, and the EPA set up an inbox to receive the requests. A data-center developer called Novva, which wanted to run 96 diesel generators without emission limits, wrote that its project was "essential for national security and maintaining AI supremacy" ^[6]. So did others.

1 in 3 share of requests approved at the EPA's presidential-exemption inbox — More than 500 applications have arrived, by an Environmental Defense Fund tally; Novva's own request was among those denied ^[6].

Novva's chief executive, Wes Swenson, is franker about the mechanism than most.

Almost everybody would claim it’s some kind of national security issue. — Wes Swenson

The exemption is not a rubber stamp. It does not need to be one. The form is public, the words cost nothing, and everyone with a generator array and a deadline types them. The claim's hardest test so far met a company that had rules of its own. Anthropic, the AI lab, keeps guardrails in its models barring their use for mass surveillance and for fully autonomous weapons, and it refused to remove them. The Pentagon answered by placing Anthropic on a blacklist as a national-security supply-chain risk. A district judge found the blacklist was likely retaliation for protected speech, noting that the measures "do not appear to be directed at the government's stated national security interests" ^[7]. The D.C. Circuit, the court above, saw the case differently.

If the concern is the integrity of the operational chain of command, the Department of War could just stop using Claude. — Rita F. Lin

What carried the day was not the stated security rationale, which the lower court had read as pretext. It was the war ^[8]. The race named the threat; the war supplied the weight, and the same conflict has been doing quieter work elsewhere: behind the defense secretary's limits on which reporters attend briefings, and the FCC chairman's warning that broadcasters fix their war coverage or risk their licenses ^[9]. The president has since claimed credit for stopping Anthropic from developing harmful technology, and just this month dismissed AI executives' warnings as "a hoax" ^[10]. The government's AI business went to OpenAI ^[7]. A year of this has changed what the justification is. National security used to defend particular decisions, one at a time. It now asserts which rules exist at all. And wherever the rule in question is not the executive's own, the assertion keeps breaking. Late last year the White House drafted an executive order directing the Justice Department to sue states over their own AI laws, and to withhold $42.45 billion in federal broadband money from any state that refused to repeal them. A California state senator told the president he had no power to issue a "royal edict canceling state laws," and the order was pulled back before it was ever signed ^[11]. The states, meanwhile, have not needed Washington's permission to say no. Opposition that cuts across both parties has blocked nearly $100 billion in proposed data-center projects by one count ^[12] and more than $130 billion by another ^[13]. New York enacted the first statewide moratorium, with the governor stripping the industry's sales-tax breaks ^[13]. Pennsylvania's and Texas's governors have both moved to block the facilities or their grid hookups, and Maryland's Wes Moore says a project "cannot just big foot a local jurisdiction" ^[5]. In Michigan, the Stargate consortium had its rezoning denied by its own township board, and got the land back only after a lawsuit and $14 million in community benefits ^[13]. Even the agency doing the dissolving has enforced the rule against the industry it is clearing the way for. In January the EPA ruled that the big gas turbines powering data centers, xAI's Colossus in Memphis among them, must go through federal Clean Air Act permitting; the Southern Environmental Law Center, which pressed the case, said there was "no loophole" for corporations setting up unpermitted power plants ^[14]. By August, the agency was exempting the same industry's dedicated power plants from the acid-rain program and proposing to drop the comment window for smaller pollution sources ^[5]. The courthouse door has held elsewhere, too: a federal judge in California ruled the administration had exceeded its authority in trying to end diversity, equity and inclusion requirements in grants to cities ^[15]. The pattern's method is not unique to the race. The Justice Department's new rule eliminating disparate-impact liability, the doctrine that let federal agencies penalize funding recipients for neutral policies with disproportionate racial outcomes, was added to the Federal Register without the public notice and comment that rulemaking normally requires — the very step the EPA has proposed suspending for smaller pollution sources to speed construction needed for generative AI ^[16][5]. In nearly two dozen cities the department moved to end the court-enforced police-reform agreements known as consent decrees ^[17]. The race with China is not offered as a reason there; the department speaks of restoring "true equality under the law" ^[16]. Same method, different creed. The pattern now has one clean edge. The justification dissolves whatever rule the executive branch owns, and it stops where the rule belongs to a state, a court, or a township board. There it arrives as an argument rather than an instruction, and it has been losing arguments. In Michigan it bought nothing: the country's largest data-center venture got its land only by suing the township and paying fourteen million dollars ^[13]. On the Senate floor it lost by ninety-nine votes to one ^[11].