Wednesday, October 15, 2025

Government Data Centers 10-15-25

There is no single "federal government data center completion timeline," as modernization efforts are ongoing and new directives are continuously issued. The current focus is on building a new generation of data centers for artificial intelligence (AI) and moving existing data to more efficient infrastructure like cloud services. The Federal Data Center Enhancement Act (FDCEA) sets a sunset date for certain provisions and requires agencies to meet new cybersecurity and resiliency standards by late 2025. 

Recent and upcoming timelines 

Key dates for federal data center infrastructure are driven by recent executive actions to fast-track AI development. 

2025 deadlines

  • January 14, 2025: The Office of Management and Budget (OMB) issued guidance (M-25-03) to agencies on how to enhance the reliability and resiliency of their data centers, based on the FDCEA.
  • By March 31, 2025: A competitive solicitation process for proposals from private entities to build and operate AI data centers on federal lands was scheduled to begin.
  • By June 30, 2025: Winning proposals for the construction of AI data centers on federal land were to be announced.
  • By July 23, 2025: The "Accelerating Federal Permitting of Data Center Infrastructure" Executive Order was issued to expedite AI data center construction.
  • By August 2, 2025: Relevant federal agencies were required to identify existing environmental categorical exclusions for data center projects.
  • By August 22, 2025: A 30-day window was scheduled to open for special project designations to help expedite federal reviews for data center projects.
  • By January 14, 2026: Agencies must comply with the FDCEA guidance for existing agency-operated data centers. 

Longer-term timelines

  • Late 2027: The Department of Energy has set a target for the start of operations at new AI infrastructure facilities on select federal sites.
  • September 30, 2026: The FDCEA provisions for data center guidance and reporting requirements are set to expire. 

Key initiatives and history

The current strategy continues decades of data center reform.

  • Data Center Optimization Initiative (DCOI): The DCOI, issued in 2016 and updated in 2019, superseded the earlier Federal Data Center Consolidation Initiative (FDCCI). DCOI shifted the focus from mass closures to optimizing remaining facilities and moving to cloud services.
  • Past consolidation goals: Between 2010 and 2021, consolidation efforts saved agencies over $6 billion by closing thousands of data centers. The statutory authority for this initiative officially expired in October 2022.
  • Artificial intelligence (AI) mandates: Recent executive orders emphasize expediting the construction of new, non-federal data centers on federal lands to meet the intense power and processing demands of AI. 

How federal data centers are evaluated

With the closure targets now sunset, OMB guidance focuses on new evaluation criteria for agencies' data center portfolios. 

  • New requirements: Agency Chief Information Officers (CIOs) are required to centralize acquisition decisions and follow federal guidelines for cybersecurity, availability, and resiliency.
  • Cloud transition: The ongoing Cloud Smart strategy encourages agencies to use commercial services and hybrid environments when cost-effective, rather than building new facilities.
  • Regular reporting: Agencies must regularly report to the OMB on their compliance with new federal standards for cybersecurity and resiliency. 

Multiple recent executive orders have accelerated and streamlined federal government data center projects, with several scheduled to be completed by the end of 2027. These initiatives prioritize the development of artificial intelligence (AI) infrastructure by encouraging private sector partnerships and fast-tracking permitting processes. 

Federal AI data center project timeline

Based on a series of White House executive orders, several key dates are in place for the development of new AI data centers on federal lands: 

  • February 28, 2025: The Secretaries of the Departments of Defense (DoD) and Energy (DoE) must each identify at least three federal sites suitable for leasing for AI data center construction.
  • March 31, 2025: A competitive process for proposals from non-federal entities to build AI data centers on the identified federal sites is scheduled to begin.
  • June 30, 2025: The government plans to announce the winning proposals for AI data center projects.
  • End of 2025: A primary goal is to issue all permits and approvals needed for construction on federal sites by this time.
  • End of 2027: The target for these new AI data centers to commence operations. 

Other ongoing federal data center timelines

In addition to the new AI-focused initiatives, other federal data center modernization and optimization efforts continue under various programs, each with its own timeline: 

  • Data Center Optimization Initiative (DCOI): Originally established in 2016, the DCOI required agencies to close and optimize data centers. The Federal Data Center Enhancement Act of 2023 extended the initiative, with provisions scheduled to expire on September 30, 2026.
  • Agency-specific plans: Agencies like the Department of Health and Human Services (HHS) continue to release multi-year data center plans. The HHS plan for 2023–2026 details its strategy for cloud migration and the closure of five additional data centers.
  • Individual project variability: It is important to note that specific data center completion timelines can vary significantly. Standard data center development, from site selection to construction, can take three to six years, though federal initiatives aim to expedite this process.

https://www.google.com/search?q=federal+government+data+center+completion+timeline

Norb Leahy, Dunwoody GA Tea Party Leader

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