New York Gov. Kathy Hochul announces moratorium on data centers
New York Governor Kathy Hochul has enacted the nation's first statewide moratorium on AI data centers for one year. The executive order aims to allow the state to develop a regulatory framework to address concerns about energy consumption and ensure companies pay their fair share for power. The Governor cited existing power shortages and high utility bills for New Yorkers as key motivators for the pause.
New York Governor Kathy Hochul has issued an executive order establishing the nation's first statewide moratorium on the construction of the largest AI data centers. The order will pause construction for one year, allowing the state to develop a comprehensive regulatory framework to manage the industry's impact. The Governor emphasized the need to ensure data center companies, particularly "huge hyperscalers," cover their energy costs, either by generating their own power or paying a premium to use the state's grid.
Hochul highlighted a significant concern regarding the strain on New York's power grid, noting an existing shortage of power for businesses and residents, who are already facing high utility bills. She stated that the state must prevent data center growth from further escalating costs for hardworking New Yorkers. The Governor also expressed a desire for communities to receive substantial benefits and investments from these companies, as well as contributions to a larger fund for grid reinvestment, aiming for a "smart way" to proceed with data center development.
The executive order follows a nationwide Gallup poll indicating 71% opposition to new AI data centers in local areas. Initially, Governor Hochul had considered a massive data center proposal in Western New York a local decision, but the overwhelming scale of applications "flooding the zone" across America, taxing local resources, prompted the statewide intervention.