US Army Warns Lawmakers Draft Legislation Risks Data Center Push

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(Bloomberg) — The US Army has warned against lawmakers’ efforts to increase oversight for Defense Department data centers, saying the proposals risk jeopardizing efforts to build the facilities on military bases just as demand for computing power soars.

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Two proposals from members of Congress intended to limit the use of Chinese-sourced equipment in defense-related data centers could make it difficult to build these facilities given the domestic industrial base doesn’t yet manufacture some of the necessary components, according to a senior Army official, who briefed reporters on condition of anonymity.

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That would discourage private companies from investing in data center projects the Army views as critical to future military operations that will rely on a large amount of computing power, the official said.

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The official’s statement follows legislative backlash to a recently announced Army plan to partner with Carlyle Group Inc. on a data center at Fort Bliss, Texas, and with KKR & Co. Inc.-backed CyrusOne on a similar project at Dugway Proving Ground, Utah. 

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The privately-owned and operated facilities would be built on Army land through long-term leases in exchange for computing capacity needed to support military operations and AI-driven systems.

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If the data centers do service the government, their owners would have to comply with existing security regulations, the official said, outlining a plan that included a special, secure building as part of the data center campus that would be dedicated to that use at Fort Bliss.

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One proposal from Representative Cory Mills, a Florida Republican, would prohibit enhanced-use lease agreements for data facilities unless operators avoid equipment containing significant components manufactured in — or tied — to entities in China, Russia, Iran or North Korea. The restrictions would apply to circuit boards, advanced semiconductors and other technologies.

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The Mills proposal was tucked into the House’s version of a massive must-pass defense bill approved this week by the Armed Services Committee.

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Another proposed piece of legislation from Representative John Garamendi, a California Democrat, would require the Pentagon to certify to Congress that any planned data center on a military base would not jeopardize national security, military readiness, energy and water resources, or surrounding communities.

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That did not make it into the defense bill. 

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The Army currently spends about $700 million annually on cloud computing and expects demand for computing power to increase significantly as it expands AI-enabled capabilities, the Army official said.

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—With assistance from John Harney and Roxana Tiron.

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