This week’s newsletter tracks a flurry of major developments shaping the future of U.S. tech policy. From sweeping FCC proposals to modernize telecom infrastructure and expand broadband access, to Meta’s escalating AI ambitions and mounting scrutiny of its data center impact, federal agencies and industry giants alike are facing high-stakes decisions. Meanwhile, a global Microsoft breach raises fresh questions about government cybersecurity, and Congress moves to redefine the crypto landscape. Dive into the key updates driving this week’s policy conversation in Washington..

In this week’s Nimitz Tech:

• China: Sen. Tom Cotton sounds the alarm on Microsoft’s use of Chinese engineers in Pentagon systems, citing national security risks.

• Data Centers: Zuckerberg unveils plans for a data center as big as Manhattan to power Meta’s bold AI ambitions.

• Cyber: A global cyberattack exploiting a major Microsoft flaw has breached U.S. government servers—and the damage may already be done.

WHO’S HAVING EVENTS THIS WEEK?

JULY 24, 2025

July 2025 Open Commission Meeting: The FCC has publicly released the draft text of each item expected to be considered at this Open Commission Meeting with the exception of items involving specific, enforcement-related matters including restricted proceedings and hearing designation orders. More info here.

TECH NEWS DRIVING THE WEEK

In Washington

• Senator Tom Cotton (R-Ark.) has called on the Department of Defense to address concerns over Microsoft’s use of Chinese engineers—monitored by U.S. “digital escorts”—to maintain Pentagon cloud systems. Citing a ProPublica report, Cotton warned that these escorts may lack the technical expertise to detect security threats, posing serious risks given China's aggressive cyber capabilities. He requested detailed information about defense contractors employing Chinese nationals and urged tightening security protocols. In response, Microsoft announced it would no longer involve China-based engineers in Defense Department cloud support, reaffirming its commitment to secure U.S. government systems amid growing concerns over Chinese-linked cyberattacks.

• The U.S. House of Representatives has overwhelmingly passed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), marking the country's most significant step yet toward regulating cryptocurrency. The legislation, now headed to President Donald Trump for final approval, aims to create a legal framework for stablecoins, potentially opening the floodgates for new digital currency projects. While industry leaders are hailing the bill as a breakthrough for innovation and market clarity, critics are already raising concerns about Trump’s financial ties to crypto firms. If signed into law, the GENIUS Act could dramatically reshape the landscape of U.S. digital finance.

• ProPublica has uncovered plans by the Trump administration to build an IRS system granting Immigration and Customs Enforcement (ICE) sweeping access to confidential taxpayer data, including home addresses, to accelerate mass deportations. Internal emails reveal the IRS’s top lawyer was ousted after refusing ICE’s request for the addresses of 7.3 million individuals, citing legal deficiencies. Despite long-standing privacy protections, engineers are now constructing an automated data-sharing platform that experts warn could result in errors, legal violations, and abuse of IRS data. Critics—including IRS staff, legal experts, and Sen. Ron Wyden—warn that the system undermines taxpayer trust and transforms the IRS into an enforcement tool for immigration raids. Documents show plans to expand the program beyond noncitizens, raising fears it could be used to target U.S. citizens under the guise of criminal investigations.

National

• Meta CEO Mark Zuckerberg announced the company will spend hundreds of billions of dollars on artificial intelligence development, including building a massive data center nearly the size of Manhattan. Dubbed Prometheus and Hyperion, these multi-gigawatt facilities are part of Meta’s aggressive push to lead in artificial general intelligence (AGI) amid intensifying competition from OpenAI and Google. Despite investor concerns, Zuckerberg defended the spending by pointing to Meta’s strong advertising revenues and forecasted new revenue streams from AI products like the Meta AI app and image-to-video ad tools. The newly reorganized Superintelligence Labs—led by high-profile hires including former Scale AI CEO Alexandr Wang—aims to place Meta at the forefront of AI innovation.

• After Meta broke ground on a massive $750 million data center in Newton County, Georgia, nearby residents like Beverly and Jeff Morris began experiencing severe water issues, with their well water turning to sediment-laced trickles. The data center—now consuming about 10% of the county’s daily water—illustrates how tech giants’ thirst for water to cool AI systems is straining local resources. With rising water costs, a looming countywide deficit, and multiple new data center proposals demanding millions of gallons per day, residents and environmental experts warn the community’s future water supply is in jeopardy. Despite Meta’s denials, residents remain burdened with repair bills, unusable bathrooms, and no clear path to relief—while lawmakers prioritize tax revenue over water equity.

International

• Hackers have launched a sweeping cyberattack targeting a critical vulnerability in Microsoft’s SharePoint software, compromising federal and state agencies, energy firms, universities, and foreign governments. The "zero-day" exploit, which hit before any patch was available, allowed attackers to access sensitive data and obtain cryptographic keys that could enable persistent system access—even after patches are applied. At least two U.S. federal agencies were breached, and states like Arizona scrambled to assess vulnerabilities amid rising fears of deeper, untraceable infiltrations. While Microsoft has released one patch and is developing others, critics cite the company's repeated security failures and slow responses. The attack highlights the widening cybersecurity gap exacerbated by recent cuts to federal cyber defense teams and mounting concerns over Microsoft's dominance in government IT infrastructure.

FOR FUN

• 🐋 Profs & Pints: Ancient Sea Monsters at Penn Social (7/22)

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