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A national emergency declared over the United States bulk-power system prohibits covered foreign electric equipment and cites the rapid growth of data centres and artificial intelligence as having magnified the consequences of a supply disruption
This is an energy security order, not an AI rule, and it is worth reading precisely for that reason. The electricity that AI build-out depends on has just been placed inside an IEEPA emergency, with the Secretary of Energy able to condition or order the removal of equipment already installed.
Bottom line: A national emergency declared under the International Emergency Economic Powers Act and the National Emergencies Act. It prohibits defined transactions in foreign-produced bulk-power system electric equipment tied to a Covered Foreign Entity, and lets the Secretary of Energy impose conditions on equipment installed before the order, up to removal.
Who this affects: Utilities and transmission operators, data centre developers and their energy counsel, equipment vendors and integrators, battery storage and inverter suppliers, and anyone procuring industrial control systems for generation or substation use.
Issue date: Signed 26 August 2026, published in the Federal Register 31 August 2026 at 91 FR 55995. Implementing rules are due within 120 days; recommended Federal Acquisition Regulation revisions within 180 days.
What changed: Transactions initiated after the date of the order fall within the prohibition once the Secretary makes the required determinations. Equipment acquired or installed before the order is not exempt from conditions, including isolation, replacement or removal.
Analysis: Note where AI actually appears. It is not in the operative provisions but in the finding, as one of four demand drivers said to have magnified the consequences of an attack or supply disruption. The operative reach into AI infrastructure comes instead through the equipment definition, which covers battery energy storage, grid-connected inverters, uninterruptible power supplies supporting critical infrastructure, and industrial control systems, together with their software, firmware and remote-access capabilities.
Primary sources: Executive Order 14421, official GPO text (91 FR 55995) · Same document, GPO PDF
- Instrument
- Executive Order 14421, Declaring a National Emergency To Secure the United States Bulk-Power System
- Authority
- President of the United States, under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code
- Citation
- 91 FR 55995, pages 55995 to 55999, published 31 August 2026; signed 26 August 2026
- Jurisdiction
- United States, federal
- Implementing agency
- Secretary of Energy, in coordination with the Director of the Office of Management and Budget and in consultation with the Secretary of War, the Secretary of Commerce, the Secretary of Homeland Security and the Director of National Intelligence
- Status
- In force. A declared national emergency.
- Bindingness
- Binding. Prohibitions apply notwithstanding any contract entered into or licence or permit granted before the date of the order.
- Issue date / next deadline
- Signed 26 August 2026. Implementing rules or regulations within 120 days. Recommended FAR revisions within 180 days, with the FAR Council to consider proposing amendments within 90 days of receiving them.
- Reporting
- Recurring and final reports to Congress under section 401 of the NEA (50 U.S.C. 1641) and section 204(c) of IEEPA (50 U.S.C. 1703(c))
- Editorial Note
- Informational analysis for working professionals, not legal advice. Confirm how any rule applies to your situation with qualified counsel.
- Primary source
- https://www.govinfo.gov/content/pkg/FR-2026-08-31/html/2026-17843.htm
Where AI appears in the order
The finding is explicit about demand. The order records that since the President's first term the threat regarding foreign supply of bulk-power system electric equipment has become more acute, and gives the reason: the rapid growth of advanced manufacturing, data centres, artificial intelligence and defence production has increased the Nation's dependence on abundant, reliable electricity and magnified the consequences of a successful attack or supply disruption on the bulk-power system.
That is the whole of the AI content, and it is a recital rather than an operative provision. Nothing in the order regulates AI systems, models or their deployment.
The stated mechanism of concern is remote compromise. The order notes that minimal restrictions on acquisition or operation of foreign-produced equipment augment the ability of some foreign entities to create and exploit vulnerabilities, giving as an instance equipment with digital backdoors built into their systems that allow a foreign country to access that equipment remotely. It adds a second, non-cyber concern: reliance on foreign sources creates a supply chain vulnerability that could eliminate supply as a result of disruptions in international trade or other causes.
For an AI infrastructure audience the significance is therefore indirect but real. The order treats AI-driven load growth as a reason to tighten control of the grid's supply chain, which is the layer that new capacity actually depends on.
What is prohibited
Section 2(a) prohibits any acquisition, importation, transfer or installation of foreign-produced bulk-power system electric equipment by any person, or with respect to any property, subject to United States jurisdiction, where the transaction involves property in which a foreign country or national has any interest, including through an interest in a contract for the provision of the equipment, and where the transaction was initiated after the date of the order.
The prohibition bites only once the Secretary of Energy makes two determinations. First, that the transaction involves such equipment, or any critical component, software, firmware, digital service, maintenance service or remote-access capability associated with it, designed, developed, manufactured or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of a Covered Foreign Entity.
Second, that the transaction poses an undue risk of sabotage, subversion, unauthorised access, malicious remote action or supply disruption affecting the bulk-power system; or an undue risk of catastrophic effects on the security or resilience of United States critical infrastructure or the economy; or otherwise poses an unacceptable risk to national security or to the security and safety of United States persons.
The prohibitions apply notwithstanding any contract entered into, or licence or permit granted, before the date of the order. Evasion is separately prohibited, as is any conspiracy to violate the order.
The retrospective power, which is the part to plan around
Section 2(b) is the provision with the longest tail. On making the determinations, the Secretary may impose conditions on the continued use, operation, maintenance, servicing or updating of foreign manufactured or operated bulk-power system electric equipment acquired or installed before the date of the order, including requirements to identify, isolate, monitor, secure, disconnect, replace or remove it.
There are guardrails. Before directing isolation, disconnection, replacement or removal, the Secretary must consider effects on reliability and safety, the availability of secure replacements, and continuity of essential service, and may establish phased compliance. Section 3 separately authorises the Secretary to order the replacement of equipment posing an unacceptable risk.
There is also a route to certainty in the other direction. Section 2(e) allows the Secretary to establish criteria and procedures for recognising particular equipment and vendors as pre-qualified for future transactions and therefore exempt from the prohibition, and to publish a list of them, while preserving the Secretary's authority to regulate any transaction anyway. Section 2(c) allows mitigation measures to be designed or negotiated as a precondition to approval of a transaction or class of transactions.
The equipment definition does the real work
Bulk-power system is defined to include transmission lines rated at 69,000 volts or more, and expressly excludes facilities used in the local distribution of electric energy.
The equipment list is long and specific: reactors, capacitors, substation transformers, utility-scale and other grid-connected inverters, battery energy storage systems, uninterruptible power supply systems supporting critical infrastructure, coupling capacitors, large, small and backup generators, substation voltage regulators, shunt capacitor equipment, automatic circuit reclosers, instrument transformers, protective relaying, metering equipment, high voltage circuit breakers, generation turbines, industrial control systems including remote terminal units, programmable logic controllers and intelligent electronic devices, distributed control systems, and safety instrumented systems.
It then extends the analysis beyond hardware. In determining whether equipment is within scope, agencies may also consider associated software and firmware, remote access capabilities, lifecycle maintenance and update mechanisms, and other supply chain dependencies that could present an unacceptable risk.
The order also fences the definition. Items not on the list, or that have broader application beyond the bulk-power system unrelated to the national security concerns identified, are outside its scope.
Covered Foreign Entity is defined as a country, or any person owned by, controlled by or subject to the jurisdiction or direction of the government of a foreign country, that is subject to a United States arms embargo or sanctions regime under the International Traffic in Arms Regulations at 22 C.F.R. 126.1, or that the Secretary has determined, in consultation with the Secretary of War, the Director of National Intelligence and the Assistant to the President for National Security Affairs, is engaged in conduct detrimental to the national security or foreign policy of the United States.
Procurement, and the calendar
Section 4 turns to federal buying. Within 180 days the Secretary, in consultation with the Federal Acquisition Regulatory Council, must develop and submit recommended revisions to the Federal Acquisition Regulation to ensure national security risks are adequately considered in federal procurement concerning energy infrastructure, and to prioritise acquisition of United States-manufactured energy infrastructure. Within 90 days of receiving those recommendations, the FAR Council is to consider proposing amendments for notice and public comment.
On the regulatory side, the Secretary is to publish rules or regulations implementing the delegated authorities within 120 days of the order, and to establish procedures to license transactions that would otherwise be prohibited. As soon as practicable, the Secretary is also to begin identifying bulk-power system equipment already in place that presents concerns.
Section 6 requires recurring and final reports to Congress under the National Emergencies Act and IEEPA, which is where the practical record of how broadly the Secretary reads the order will first become visible.
The order also carries the standard clause that it creates no right or benefit enforceable against the United States, and is to be implemented consistent with applicable law and subject to the availability of appropriations.
Read this as a supply chain instrument that now sits underneath AI capacity planning. Three things to do. Check whether anything in your build is on the equipment list, paying attention to the items that data centre projects touch most directly: grid-connected inverters, battery energy storage, uninterruptible power supplies supporting critical infrastructure, and industrial control systems. Extend that check to software, firmware, remote-access capability and update mechanisms, because the order says agencies may consider those in deciding whether equipment is in scope. And do not treat already-installed equipment as settled, since the Secretary may impose conditions on it up to removal, subject to considering reliability, replacement availability and continuity. The dates to diary are 120 days for implementing rules and 180 days for the recommended FAR revisions.
Source File
https://www.govinfo.gov/content/pkg/FR-2026-08-31/html/2026-17843.htm
Open the GPO text and confirm four things: the heading Executive Order 14421 of August 26, 2026 with the Federal Register citation for 31 August 2026; the finding in section 1 naming the rapid growth of advanced manufacturing, data centers, artificial intelligence, and defense production; section 2(a) and its two required determinations; and section 5, containing the definitions of bulk-power system, bulk-power system electric equipment and Covered Foreign Entity.
The rapid growth of advanced manufacturing, data centers, artificial intelligence, and defense production has increased the Nation's dependence on abundant, reliable electricity and magnified the consequences of a successful attack or supply disruption on the bulk-power system. Executive Order 14421, section 1, 91 FR 55995
FAQ
Is this an AI regulation?
No. It is an energy security order made under IEEPA and the National Emergencies Act. Artificial intelligence appears in the finding as one of four demand drivers, alongside advanced manufacturing, data centres and defence production. Nothing in the operative provisions regulates AI systems or models.
What is actually prohibited?
Acquisition, importation, transfer or installation of foreign-produced bulk-power system electric equipment, where the transaction was initiated after the date of the order, involves a Covered Foreign Entity in the supply of the equipment or its components, software, firmware, digital or maintenance services or remote-access capability, and where the Secretary of Energy determines it poses one of three specified categories of risk.
Does it reach equipment already installed?
Yes. The Secretary may impose conditions on the continued use, operation, maintenance, servicing or updating of equipment acquired or installed before the order, including requirements to identify, isolate, monitor, secure, disconnect, replace or remove it, after considering reliability and safety, availability of secure replacements and continuity of essential service.
Which equipment is covered?
A long list including substation transformers, grid-connected inverters, battery energy storage systems, uninterruptible power supplies supporting critical infrastructure, protective relaying, high voltage circuit breakers, generation turbines, industrial control systems such as remote terminal units and programmable logic controllers, distributed control systems and safety instrumented systems. Agencies may also consider associated software, firmware, remote access capabilities and update mechanisms.
What is a Covered Foreign Entity?
A country, or a person owned by, controlled by or subject to the jurisdiction or direction of a foreign government, that is subject to a US arms embargo or sanctions regime under the International Traffic in Arms Regulations at 22 C.F.R. 126.1, or that the Secretary determines is engaged in conduct detrimental to US national security or foreign policy.
What are the deadlines?
Implementing rules or regulations within 120 days of the order. Recommended Federal Acquisition Regulation revisions within 180 days, after which the FAR Council has 90 days to consider proposing amendments for notice and comment.
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