New York State halts the construction of new AI data centres
New York State Governor Kathy Hochul signed an executive order imposing a one-year moratorium on new hyperscale data centers requiring 50 megawatts or more. This decision aims to allow time for the state to establish a comprehensive regulatory framework to assess environmental impacts and consumer costs. The action makes New York the first US state to enact such a statewide ban, following a similar bill passed by the state legislature.
New York Governor Kathy Hochul has enacted a one-year moratorium on the construction of new hyperscale data centers, defined as facilities with an energy requirement of 50 megawatts or more. This executive order, signed on Tuesday, positions New York as the first US state to implement such a ban, allowing time to develop a comprehensive regulatory framework to evaluate the environmental impact and potential costs to consumers.
The Governor's action follows the New York State Legislature's passage of a bill in June that also imposed a one-year moratorium on certain permits for large data centers. Governor Hochul emphasized the urgency of addressing concerns that AI data centers could overwhelm the state's electricity grid and escalate costs for residents. This move is supported by many New Yorkers and environmental groups, who have voiced concerns over the sector's significant energy and water consumption, especially in light of a nearly 68% rise in residential electricity prices since 2019.
While the decision garnered praise from environmental organizations and politicians like Senators Kirsten Gillibrand and Kristen Gonzalez, it also faced criticism. Pennsylvania Senator John Fetterman suggested the ban would benefit China, and data center developers argued that foreign rivals exploit anti-AI sentiments in the US.
New York's moratorium is part of a broader national discussion, with federal legislative efforts also underway. Vermont Senator Bernie Sanders and New York Congresswoman Alexandria Ocasio-Cortez introduced the Artificial Intelligence (AI) Data Centre Moratorium Act in Congress, aiming for a nationwide suspension of new data center construction until robust safety and regulatory measures are in place to mitigate environmental impact, prevent utility cost increases, and ensure equitable wealth distribution. Several other towns and counties across the US, including in Missouri, Indiana, Georgia, and North Carolina, have previously approved similar temporary bans, and at least 11 states are reportedly considering comparable measures.