Gov. Hochul signed an executive order Tuesday that blocks construction of new large data centers for up to a year as New York moves to protect the environment and electric grid from the resource-gobbling facilities that power artificial intelligence.
The order is the nation’s first statewide moratorium on the controversial sprawling data centers, which house thousands of computer servers and require massive amounts of energy and a steady supply of water to keep cool.
“Progress shouldn’t arrive with a higher utility bill,” Hochul said at an announcement on the Brooklyn waterfront. “We have no choice but to address the problems raised by these new facilities.”
“These places should only be built in places that want them,” the governor added. “They should always put the needs of local communities first.”
Hochul’s move halts all state permits for new large data centers and orders regulators to create standards that address environmental impacts, energy demand, water usage and other factors.
She said new rules would require data center operators to fund their own sources of power and water, or tap into the existing the grid by paying a higher price than existing users. They would also bar tax breaks for AI data centers and union labor.
Hochul insisted that the Empire State will remain a magnet for tech investment and innovation.
“People aren’t afraid of technology, they’re afraid of being left behind by it,” Hochul said.
Many voters oppose the centers because they believe they increase demand for resources like electricity and water, hiking rates for consumers.
Big Tech and some proponents counter that data centers create jobs in the communities where they are built and are needed to counter geopolitical rivals like China in a global race to lead in the fast-growing AI industry.
Hochul’s move suggests Democrats will seek to leverage the issue to boost her reelection campaign and some midterm congressional races this fall, as the party seek to focus on affordability issues in New York and nationwide.
Her Republican opponent, Nassau County Executive Bruce Blakeman, opposes a statewide moratorium on data centers, saying local governments should be free to strike deals with tech companies that promise enough economic benefits.
State lawmakers approved their own moratorium bill, but Hochul’s office says the measure is flawed and would delay any action, whereas the executive order would take effect immediately once signed.
With News Wire Services