White House drops data centers from critical tech list — federal funding cut off

The White House has revised its list of critical and emerging technologies (CET) for the first time since February 2024. Data centers and advanced cloud services have been removed from the list, according to Tom's Hardware.

The updated National Security Strategy for Science and Technology was published by the White House Office of Science and Technology Policy. The appendix containing the CET list was shortened from 18 to 14 items. Some technologies were replaced with new ones, while four were removed entirely without substitution.

The CET designation is crucial for federal agencies: it guides export control rules, foreign investment reviews, and the allocation of government funding. By removing data centers and cloud services from the list, the administration effectively cuts off federal financial support for these sectors. This comes at a time when tech giants are competing to invest billions of dollars in building new data center infrastructure.

The strategy document emphasizes the "integral role" of science and technology in achieving national security goals and provides detailed recommendations for federally funded research and development. However, the authors apparently concluded that data centers and cloud infrastructures are already mature enough, driven by massive private investment, and no longer require government stimulus.

Being removed from the CET list does not constitute a complete ban on federal funding, but it significantly lowers the priority of these areas when distributing budget resources. Companies building data centers will now have to rely solely on their own capital and market mechanisms.

The updated list still includes other critical technologies such as artificial intelligence, quantum computing, advanced semiconductors, biotechnology, and autonomous systems. The exclusion of data centers and cloud services suggests that the U.S. government views these as commercially viable sectors that no longer need public support to maintain national competitiveness.

Industry analysts note that the decision could shift the competitive landscape, as companies with deeper pockets may have an advantage in funding large-scale data center projects without government assistance. Smaller players might find it harder to keep up without the safety net of federal grants or tax incentives tied to the CET status.