NEW YORK (WABC) – Gov. Kathy Hochul has signed an executive order putting a one-year pause on new AI data centers across New York to give state lawmakers time to consider protecting residents and the environment.
This comes as concern grows about the enormous energy and water required to run AI data centers that house thousands of computers and servers.
“Artificial intelligence is changing the way we work, where we learn, how we communicate and how we do business,” Hochul said. “And it has sparked a heated debate about rapidly building the vast energy-guzzling infrastructure needed to run the industry.”
The move is unprecedented. New York is the first state in the country to impose a moratorium on large data center construction.
Huge complexes the size of several football fields that consume enormous amounts of electricity and water to operate and cool. Where hundreds of thousands of computer servers run 24/7 to power search engines and artificial intelligence.
The noise they generate and the resources they consume have caused uproar in many communities across the country.
The governor’s executive order imposes a one-year moratorium to establish a regulatory framework and conduct environmental impact assessments to assess energy needs, water use, water quality and air quality.
“This pause will remain in place for up to a year while New York creates the best possible framework to protect our communities,” Hochul said. “Guardrails to reduce risk to our energy grid, minimize land disruption and noise pollution, and protect our natural resources, particularly our water supply.”
Tech companies and other supporters have argued that measures to block data center construction hurt job growth in local communities and cede to China in the race for leadership in the fast-growing AI industry.
Earlier this year, Maine appeared poised to impose a similar moratorium. But the state’s Democratic governor, Janet Mills, rejected the measure because it would have blocked a planned data center in a town struggling after the closure of a local mill. Moratoriums have been proposed in at least a dozen states but have not gone far, although some counties and municipalities have imposed their own temporary bans.
The decision in New York also has political significance for Hochul’s re-election campaign and the state’s close congressional races this fall, as Democrats seek to address affordability concerns due to high utility bills and other pocketbook woes. The governor this year tempered New York’s ambitious greenhouse gas reduction goals, citing rising energy costs for consumers.
Hochul’s Republican opponent in the governor’s race, Nassau County Executive Bruce Blakeman, opposes a statewide moratorium and says local governments should be allowed to contract with technology companies for data center projects that promise enough economic benefits.
The state legislature passed its own moratorium bill this year, but Hochul’s office described the legislation as complex and said it needed more work. Instead, the governor is opting for an executive order that will take effect immediately upon signing.
At this point, New York was not yet a destination for the largest hyperscale data centers.
Dan Diorio, Executive Vice President of State Policy and Government Affairs, Data Center Coalition, released a statement that said, in part:
“As hundreds of billions of dollars are dedicated to expanding the nation’s digital infrastructure, Governor Hochul’s statewide moratorium on data centers will ensure that these investments, jobs and economic activity flow elsewhere and not to New York – with implications well beyond the data center industry.”
“The moratorium will also weaken New York’s economy and send a signal that the state is closed for business. It risks draining tens of millions of dollars in investments and depriving local communities of the opportunity to stimulate investment and jobs. At the same time, New York will be forced to forego significant long-term economic growth, high-paying jobs and important tax revenues to neighboring states – tax revenues that can fund local priorities and reduce residents’ tax burdens.”
Mike Elmendorf, president and CEO of Associated General Contractors NYS, also released a statement condemning the moratorium. He said in part:
“A moratorium is a moratorium, whether it comes through legislation or executive order. And in any form, it is the wrong policy for New York.”
“Suspending permits for up to a year in this fast-moving sector will not simply delay projects, but permanently shift them to Virginia, Texas, Georgia and other states that are actively competing for these investments and the construction and other jobs that come with them. Once a developer makes the first move somewhere else, that project – and the opportunities and tax revenue that come with it – will not be coming back.”
The Associated Press contributed to this report.
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