New York becomes first U.S. state to impose AI data center ban

New York State Governor Kathy Hochul signed an executive order Tuesday banning the construction of new large-scale data centers that use 50 megawatts or more of power for up to a year, making 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 upheavals in generations, perhaps ever,” the governor said as he announced his executive order in New York City. “These hyperscale AI data centers consume enormous amounts of power, which threatens to literally overwhelm the capacity of our grid,” he added. “They increase costs for local taxpayers, and I do not allow those costs to be passed on to New Yorkers.”

Hochul’s thoughts echo those of many state residents and environmental leaders who have heavily scrutinized hyperscaler data centers for their excessive consumption of power and natural resources, especially freshwater.

The announcement stated that New Yorkers have seen an increase in their electricity bills and that the state’s average residential electricity price has nearly increased. 68 percent This fact has sharply skewed public opinion against new data center construction, resulting in a massive public outcry against proposed facilities in counties 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 struggling against the onslaught of massive data center proposals.” stated Laura Shindell is the director of the New York State Food and Water Watch, a high-profile nonprofit environmental organization. “This comes as a direct result of intense public pressure from people across the state demanding that their elected leaders protect them from Big Tech attacks that threaten the state’s clean air, water and the financial security of New Yorkers.”

But the praise wasn’t limited to environmental and community leaders; It also came from the governor’s allies in both Congress and the state legislature.

“This one-year moratorium is fundamentally about trust,” Senator Kirsten Gillibrand said in a statement. WRGB Albany. “Right now, New Yorkers don’t believe these massive facilities are doing them any good. Before we move forward, our communities need solid guarantees that their energy bills won’t increase, their water will be protected, and their air will stay clean.”

“Technology should make our lives better, not pollute our water, strain our energy grid, or increase our bills,” Democratic State Senator Kristen Gonzalez said in the New York State announcement. “By giving our government time to plan, we can ensure that development and innovation do not come at the expense of all of us.”

But many have expressed dissatisfaction, claiming the moratorium would hinder New York’s and the United States’ ability to compete in a rapidly expanding technological field.

“A statewide moratorium is the wrong answer to the right questions,” Republican New York State Assemblyman Scott Gray and three of his colleagues wrote. a letter He joined the governor in June opposing data center moratoriums. “It freezes investments, takes decisions out of the hands of the communities that should be making them, and copies or ignores work the governor’s own administration has already done.”

“Deployment belongs to local communities. Albany’s role is to establish the regulatory framework, facilitate interconnection, and protect taxpayers and grid reliability,” Gray and colleagues wrote. “It’s not up to Albany to decide whether a town or village wants one of these projects. It’s a local decision and should remain that way.”

“China won,” said Pennsylvania Senator John Fetterman. x post Tuesday morning.

Builders of data centers have made claims that the US’s foreign rivals are supporting the anti-AI movement and proof Foreign-created anti-AI content is being broadcast for audiences in the US.

Data center moratoriums remain popular in the state. Siena Research Institute questionnaire A June survey found that 46 percent of respondents believed a “one-year moratorium on new permits for large data centers in New York” would be good for the state, while only 21 percent thought it would be bad. Democrats supported this idea with a difference of 37 percent, while Republicans supported it with a difference of 13 percent. The same poll showed Hochul, a Democrat, leading his Republican opponent, Nassau County Executive Bruce Blakeman, by 20 percentage points; This was a hopeful sign for his re-election campaign.

The statewide moratorium, the first in the nation, marks a significant show of authority by Hochul, who is carrying out landmark policy like the one in Maine by his Democratic colleagues. Janet Mills and Virginia Abigail SpanbergerWe warned against it. Legislature of fourteen states across the country introduced invoices restricts new data center construction, none of which have been signed into law so far.

Tuesday’s moratorium may not be the governor’s last action, either. The Responsible Data Center Development Act, passed by the state legislature earlier this year, includes a one-year moratorium on the construction of new data centers with energy demands of 20 megawatts or more. Hochul has not yet taken action on the bill but has stated that he will work with the legislature.”more reviews“nature. Also, a expression A statement released by Hochul’s office said the governor is actively “pursuing legislation that would repeal sales tax exemptions for large data centers across the state.”

In addition to the pause on new data center construction, Hochul directed the NYS Department of Public Service to “consider approaches that require data centers to fund new clean electricity generation dedicated to their operations, including but not limited to customer-specific distributed energy resources and battery storage.”

Hochul says the moratorium will be lifted if the state develops a comprehensive framework to support municipalities and strong standards for construction. New York was among the states best positioned to win AI data centers in CNBC’s latest annual Best States for Business rankings.