New York becomes first US state to ban new large AI data Centers
New York has become the first U.S. state to impose a one-year moratorium on new large AI data centers, citing concerns over environmental impact, power supply, and utility costs. The ban applies to facilities using 50 megawatts or more. Governor Kathy Hochul also announced plans to pursue legislation to eliminate sales tax break exemptions for large data centers.
New York has become the first U.S. state to impose a one-year moratorium on the construction of new large artificial intelligence (AI) data centers. The statewide ban, which applies to facilities consuming 50 megawatts or more of power, was enacted amid growing concerns over the environmental and economic impacts of these energy-intensive facilities, including their strain on power supplies and utility costs.
Governor Kathy Hochul stated that the moratorium addresses the "uncertainty" data centers create for New Yorkers and directed the state's Department of Environmental Conservation to cease issuing new discretionary permits for large data centers that have not completed the approval process. During this period, the Department will also prepare a Generic Environmental Impact Statement to establish uniform standards and assess the environmental impacts of future data center development across the state.
Additionally, Governor Hochul announced plans to pursue legislation aimed at eliminating sales tax break exemptions for large data centers. While New York lawmakers recently passed a separate bill to regulate data centers, Governor Hochul's office indicated it requires further discussion before her approval. The state currently faces high electricity prices, ranking eighth nationally for residential retail electricity costs, with a 5.9% increase in May compared to the previous year.