New York Gov. Kathy Hochul Imposes First Statewide AI Data‑Center Moratorium

Governor Kathy Hochul signed an executive order that places a one‑year statewide pause on new hyperscale data‑center projects expected to draw at least 20‑50 megawatts of electricity. The moratorium is intended to give regulators time to develop standards that protect the power grid, water supplies and local communities while assessing environmental impacts such as noise, air quality and water use. Existing facilities remain operational and smaller projects are exempt.

The decision has drawn sharp criticism from several quarters. Former President Donald Trump called the move a “terrible decision” and urged an immediate reversal, arguing it will divert jobs and tax revenue to other states. David Sacks, a former Trump AI adviser, said the data‑centers are being used as a scapegoat for broader AI‑related anxieties. EPA Administrator Lee Zeldin warned that “bad energy policies,” not data‑centers themselves, drive high utility costs, signalling a rare federal challenge to the state policy.

New York’s business community, including the New York Building Congress and Upstate United, has also opposed the ban, citing potential losses of high‑paying jobs and billions in investment. Polls show roughly 70 % of respondents oppose new AI data‑centers in their area. Analysts argue the moratorium could backfire, as data‑centers historically generate tax revenue and can help mitigate electricity price hikes, while the pause may shift development to states such as Texas and Georgia.