OpenAI Proposes CHIPS Act Expansion to Cover AI Data Centers

This analysis is based on the Bloomberg report [1] published on November 7, 2025, which reported OpenAI’s request to expand CHIPS Act tax credits to AI infrastructure.

OpenAI’s policy proposal represents a strategic effort to address the massive infrastructure requirements supporting AI development. The company submitted a letter to the White House Office of Science and Technology Policy on October 27, 2025, requesting expansion of the Advanced Manufacturing Investment Credit (AMIC) from its current focus on semiconductor fabrication to include AI data centers, AI server producers, and electrical grid components [1][3]. This request comes as OpenAI has made $1.4 trillion in capital commitments for data center construction over the next eight years, projecting revenue growth from above $20 billion in 2025 to hundreds of billions by 2030 [3].

The proposal targets critical infrastructure bottlenecks facing the AI industry. Data center grid power demand is projected to rise 22% in 2025 alone, reaching 61.8 GW, and nearly triple by 2030 [5]. Utilities are forecasting record capex increases of 22% year-over-year to $212 billion in 2025 across 47 utilities, driven largely by data center demands [5]. The market is experiencing unprecedented strain with primary market supply reaching a record 8,155 megawatts in H1 2025, up 43.4% year-over-year, yet vacancy dropped to a record-low 1.6% [4].

: The AMIC was recently enhanced under the One Big Beautiful Bill Act, increasing the credit rate from 25% to 35% for property placed in service after 2025 [4]. However, construction must begin before 2027 to qualify, creating significant urgency for industry participants. This timing constraint could accelerate investment decisions and create first-mover advantages for companies with stronger balance sheets.

: OpenAI’s request specifically includes electrical grid components such as transformers and specialized steel, addressing fundamental supply chain constraints [1]. The proposal also calls for strategic reserves of raw materials including copper, aluminum, and processed rare earth minerals, highlighting broader industry concerns about material availability [3].

: While OpenAI initiated the request, the proposal would benefit the entire AI ecosystem. Eight hyperscalers expect a 44% year-over-year increase to $371 billion in 2025 for AI data centers and computing resources [5]. The tax credit expansion could create significant competitive advantages for early adopters while potentially raising barriers for smaller AI companies lacking similar capital resources.

: The proposal requires additional legislative action to expand coverage beyond semiconductor manufacturing facilities [4]. There is uncertainty about congressional approval timing and the final structure of any expanded credit program. Environmental review and permitting processes remain significant bottlenecks that could delay infrastructure deployment even with tax incentives [3].

: Recent market performance indicates investor recognition of infrastructure demands, with utilities sector up 4.68%, energy up 1.81%, and financial services up 2.26% [0]. This suggests market participants are pricing in increased capital spending related to AI infrastructure development.

: Industry analysis suggests that a $1 trillion investment in AI infrastructure could boost GDP by 5% or more in the first three years [2]. The 35% tax credit expansion would significantly lower the effective cost of capital and unlock private investment, but raises questions about the appropriate role of government subsidies in supporting private sector AI development.

OpenAI’s proposal to expand the CHIPS Act tax credit to AI infrastructure represents a significant policy development that could reshape the competitive landscape for AI companies and their suppliers. The 35% tax credit would apply to AI data centers, servers, and electrical grid components, potentially reducing infrastructure costs for companies with $1.4 trillion in committed capital spending [1][3]. The proposal addresses critical supply chain constraints including power grid limitations, with data center demand projected to nearly triple by 2030 [5].

The policy change would benefit infrastructure providers including data center operators, power equipment manufacturers, and utility companies, while creating timing pressure due to the 2027 construction deadline [4]. However, the proposal also raises concerns about reliance on government subsidies and the sustainability of current AI capital expenditure levels. The request for regulatory streamlining and strategic material reserves highlights broader infrastructure challenges facing the AI industry [3].