U.S. President Joe Biden (2l), with U.S. Senate Majority Leader Chuck Schumer and New York Governor Kathy Hochul, look at a 3D rendering of a future Micron factory that Micron Technology CEO Sanjay Mehrotra (l) during a tour of the Micron Pavilion at the SRC Arena and Events Center at Onondaga Community College in Syracuse, New York, October 27, 2022 presented.
almond and | AFP | Getty Images
New York State Governor Kathy Hochul signed an executive order on Tuesday banning the construction of new large data centers of 50 megawatts or more for up to a year. This makes the Empire State the first state in the country to impose such a ban.
“We are in the midst of one of the most significant economic transformations in generations…perhaps ever,” the governor said as he announced the executive order in New York City. “These hyperscale AI data centers consume enormous amounts of power and actually threaten to exceed the capacity of our network,” she added. “They are driving up costs for local taxpayers, and I refuse to pass those costs on to New Yorkers.”
Hochul’s opinion echoes those of many citizens and environmentalists who have scrutinized hyperscaler data centers for their excessive use of electricity and natural resources, particularly fresh water.
The announcement noted that New Yorkers’ electric bills have skyrocketed, with the average residential electricity price in the state rising nearly 68 percent since 2019. This fact has greatly skewed public opinion against the construction of new data centers, and there has been major public backlash against proposed facilities in townships such as Lansing and East Fishkill.
Leaders of the data center opposition celebrated the governor’s decision.
“This one-year moratorium is a major step forward for New York communities battling the onslaught of massive data center proposals,” said Laura Shindell, director of New York State’s Food & Water Watch, a top environmental nonprofit. “This is the direct result of tremendous public pressure from people across the state who are demanding their elected leaders protect them from Big Tech’s onslaught that is endangering the state’s clean air and water and the financial security of New Yorkers.”
The praise wasn’t just limited to environmental and community leaders, but also came from the governor’s allies, both in Congress and the state legislature.
“This one-year moratorium is fundamentally about trust,” Senator Kirsten Gillibrand said in a statement to WRGB Albany. “Right now, New Yorkers are not convinced that these massive facilities will benefit them. Before we move forward, our communities need ironclad guarantees that their energy bills won’t skyrocket, their water will be protected and their air will stay clean.”
“Technology should improve our lives, not pollute our water, strain our energy grid or drive up our electric bills,” said State Senator Kristen Gonzalez, a Democrat, in the New York state announcement. “By giving our state time to plan, we can ensure that development and innovation do not come at the expense of all of us.”
However, many expressed dissatisfaction, claiming that the moratorium would hurt New York’s – and the United States’ – competitiveness in a fast-growing technology sector.
“A statewide moratorium is the wrong answer to the right questions,” New York State Rep. Scott Gray, a Republican, and three of his colleagues wrote in a letter to the governor in June opposing data center moratoriums. “It freezes investment, deprives communities of decisions they should be making, and duplicates or ignores the work the governor’s administration already has underway.”
“Siting is a matter for local communities. Albany’s role is to set the regulatory framework, facilitate interconnection, and protect ratepayers and grid reliability,” Gray and his colleagues wrote. “It’s not Albany’s job to decide for a city or village whether they want one of these projects. That’s a local decision and it should stay that way.”
“China is winning,” Pennsylvania Sen. John Fetterman said in an X post Tuesday morning.
Those building data centers have alleged that foreign rivals of the US are supporting the anti-AI movement, and there is evidence that anti-AI content created abroad is being published for a US audience.
A moratorium on data centers remains popular in the state. A Siena Research Institute poll conducted in June found that 46% of respondents believed a “one-year moratorium on new permits for large data centers in New York” would be good for the state, while just 21% said it would be bad. The issue also appeared to be fairly bipartisan: Democrats supported the idea by a majority of 37 percentage points and Republicans by a majority of 13 percentage points. The same poll showed Hochul, a Democrat, leading her Republican challenger, Nassau County Executive Bruce Blakeman, by a margin of 20 percentage points, a promising sign for her re-election campaign.
The first statewide moratorium represents a significant show of power by Hochul, who has now implemented groundbreaking policies that her Democratic colleagues, such as Janet Mills of Maine and Abigail Spanberger of Virginia, have warned against. Fourteen state legislatures across the country have introduced bills restricting the construction of new data centers, but none have been signed into law.
Tuesday’s moratorium is unlikely to be the last action from the governor’s office. The Responsible Data Center Development Act, passed by the state legislature earlier this year, imposes a one-year moratorium on the construction of new data centers with peak energy demands of 20 megawatts or more. Hochul has not yet taken action on the bill, but has indicated she will work with lawmakers to “further review” its nature. Additionally, a statement released by Hochul’s office said the governor is actively “pursuing legislation to repeal sales tax exemptions for giant data centers across the state.”
In addition to the pause on new data center construction, Hochul directed the New York State University Department of Public Service to “explore approaches to requiring data centers to fund new clean power generation for their operations, including, but not limited to, distributed energy resources and customer-site battery storage.”
Once the state develops a comprehensive framework to support communities and strict standards for construction, the moratorium will be lifted, Hochul says. New York was ranked as one of the best states to attract AI data centers in CNBC’s most recent annual Top States for Business rankings.
Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.
https://www.cnbc.com/2026/07/14/new-york-ai-data-center-ban.html
