Sovereign Wealth Funds Are Targeting US Infrastructure. Will CFIUS Stop Deals in Their Tracks?

President Trump’s America First Investment Policy aims to reshape the CFIUS landscape—raising new questions for US companies and foreign investors.

President Trump’s whirlwind trip through the Middle East in May led to “over $2 trillion in great deals,” including a $20 billion investment from the Saudis into US data centers and energy infrastructure.

Such investments are of particular interest given heightened regulatory scrutiny on foreign financing of critical infrastructure from the Committee on Foreign Investment in the United States (CFIUS). In 2023–2024, CFIUS imposed over $70 million in monetary penalties and blocked or delayed numerous transactions.

Given its focus on US industrial competitiveness, the current Trump administration is unlikely to reverse this trend. In fact, the president’s America First Investment Policy memorandum from earlier this year mandates tighter controls over investments from nations deemed adversarial (e.g., China) and expands CFIUS’s authority to include investments into US greenfields and farmland.

At the same time, the policy memo “emphasizes that the US welcomes passive investment (i.e., not granting the investor access to technical information or governance rights) in cutting-edge businesses from all foreign investors, including from … sovereign wealth funds.”

This policy shift raises questions for sovereign wealth funds (SWFs) and the US infrastructure players that may seek their capital in the months and years to come. Among them:

• Will the US public and political opposition allow foreign SWFs to invest in critical infrastructure?
• What recourse will they have to prevent it?
• What role will an evolving CFIUS play in regulating these investments?
• What can US companies courting foreign investors in this respect do to prepare for potential risks?

CFIUS’s Evolving Role

Chaired by the US Treasury Department, CFIUS’s remit is to review foreign investments to determine their impact on US national security. Inflows to US companies that develop or build critical technology or infrastructure are among the committee’s central foci.

Most CFIUS filings are submitted voluntarily, though foreign investors into US companies with critical technology have mandatory filing requirements; US investors and businesses may (or must) file a joint voluntary notice or declaration. Upon receipt of such filings, CFIUS clears the transaction, makes a recommendation to the president to “block” it, or negotiates a national security agreement (NSA) ordering the transaction parties to undertake certain activities and abide by certain requirements. This could involve anything from prohibitions on foreign investors’ access to the facility or technology to developing a governance policy that addresses the NSA’s stipulations.

Under current law, SWFs are considered government entities and required, per CFIUS, to undertake a 45-day review followed by a 45-day investigation. However, given the Trump administration’s policy shifts and a new CFIUS pilot program underway, it remains unclear whether it will be easier for such SWFs to pass through the CFIUS process. The new pilot program, announced by the Treasury in response to the America First Investment Policy, currently lacks detail on implementation and clarity on which investors will likely benefit from the new process.

Should passage be streamlined, opponents of such investments have limited recourse, as CFIUS is ultimately the president’s process. Congress can’t issue a block, and changing CFIUS’ rules would take years. Similarly, CFIUS decisions are not subject to judicial review, and few legal options prohibit a transaction once it has gone through. Though state and local regulations could come into play—and states and municipalities have instituted their own CFIUS-like processes—there has of yet been no engagement over the question of which government entity has precedent.

This leaves the court of public opinion. Ultimately, a well-crafted public relations (PR) campaign may be the only route for those who disagree with a SWF’s investment into a particular sector of critical US infrastructure. Given the current administration’s sensitivity to and awareness of targeted public campaigns, the PR route may provide the concerned party the opportunity to influence decision makers.

How US Companies Can Prepare for Foreign Investment Reviews

While much remains uncertain in the world of CFIUS and critical infrastructure—particularly as it relates to financing from SWFs—US organizations courting foreign investors can take steps to get ahead of potential risks.

At the outset of an infrastructure project, US companies should understand if they will need to receive investments from SWFs and, if so, how the deal will be structured and what strings may be attached.  CFIUS will always be concerned with the level of operational control and degree of physical and logical access granted to the foreign investor in a given transaction, particularly if the foreign investor is a foreign government entity. In the case of a purely passive investment with no foreign control and access involved, CFIUS will likely have little issue with the transaction. If the transaction involves critical infrastructure and grants the foreign investor some level of control or access, CFIUS will likely require mitigation. Additionally, it’s crucial to have partners and advisors on board who have firsthand experience with national security agreement development, implementation, and oversight and are comfortable working with the regulators themselves. It’s even better if those advisors have members of a broader team with varied skillsets who can provide the technical know-how for transactions in particular industries.