New York to impose the country’s first statewide moratorium on data centers

NEW YORK (AP) — New York will block the construction of any new large data centers for up to a year so the state can create rules to protect the environment and energy grid from the power-hungry facilities that fuel artificial intelligence technology.

Gov. Kathy Hochul is set to sign an executive order Tuesday morning imposing the country’s first statewide moratorium on hyperscale data centers, which house thousands of computer servers and require massive amounts of energy and a steady supply of water to keep cool.

“As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” Hochul, a Democrat, said in a statement.

The order will pause state permitting for new large data centers and direct state regulators to create standards that address environmental impacts, energy demand, water usage and other factors, the governor’s office said.

Tech companies and other backers have argued moves to block the construction of data centers hurt job growth for local communities and cede ground to China in a race to lead in the rapidly growing AI industry.

Earlier this year, Maine seemed poised to establish a similar moratorium. But the measure was vetoed by the state’s Democratic Gov. Janet Mills because it would have blocked a proposed data center in a town that has struggled following the closure of a local mill. Moratoriums have been proposed in at least a dozen states but have not gotten far, though some counties and municipalities have imposed their own temporary bans.

The decision in New York also carries political significance for Hochul’s reelection campaign and the state’s tight congressional races this fall, as Democrats move to address affordability concerns over high utility bills and other pocketbook issues. The governor this year softened New York’s ambitious goals to reduce greenhouse gases, 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 strike deals with tech companies for data center projects that promise enough economic benefits.

The state Legislature this year approved its own moratorium bill, but Hochul’s office described the legislation as complex and said it needed additional work. Instead, the governor is opting for an executive order that would take effect immediately once signed.

New York, at this stage, has not been a destination for the biggest hyperscale data centers.