A week ago, President Trump signed Executive Order 14420, which details security risks associated with data centers, AI, and advanced manufacturing. In particular, it applies to high-voltage infrastructure operating at or above 69 kV, spanning not only physical equipment — transformers, inverters, generators, and BESS — but also associated software, firmware, and remote-access capabilities.

Because the EO takes effect retroactively, data center developers and utilities may face significant challenges in terms of compliance and deployment of foreign-produced bulk-power system equipment linked to China, Russia, and other countries deemed national-security risks. Its retroactive nature authorizes the DOE to audit, prohibit, or restrict transactions equipment already installed in the ground.

BESS might face the greatest disruption since its supply chain is dominated by Chinese manufacturers, with even domestic systems including Chinese-origin cells and battery management systems. The intent is to change Chinese pervasiveness in the supply change, with tax credits and DOE and Department of Defense/War funding that over time may increase domestic BESS and supply chain production.

Some policy experts from organizations like the Atlantic Council commend the intent to address digital backdoors, malware, and other vulnerabilities posed by “foreign’ entities’” equipment. But, they also acknowledge that in the short term, the disruption will be real, since the industry is plagued by severe shortages of power transformers and substations. Wood Mackenzie, for example, says there’s an estimated market shortage of 15% and 8%, respectively, with data center developers using approximately $22 billion of imports since last year to minimize lead times.

For now, uncertainty around the scope of the order is pervasive, as analysts and legal experts are unsure about how the bulk power definition relates to data center loads, which makes it difficult to predict the EO’s impact. As the DOE interprets the order over the following months, more clarity is expected.