New York Enacts First Statewide Moratorium on AI Data Centers

New York is pumping the brakes on new AI information facilities.

Gov. Kathy Hochul on Tuesday unveiled the nation’s first statewide moratorium on what she described as “energy-guzzling” AI data centers, or “hyperscale” amenities.

The Democratic governor signed an govt order putting a one-year pause on the development of large-scale AI information facilities in order that the state can develop new guidelines to guard its vitality grid, pure assets, and native communities, Hochul stated.

“These hyperscale AI information facilities devour huge quantities of energy, actually threatening to outpace our grid’s capability, they usually drive up prices for native ratepayers,” Hochul stated at a press convention. “And I refuse to let these prices be handed on to New Yorkers who already pay an excessive amount of for his or her utility payments.”

The transfer instantly proved controversial. Democratic Sen. John Fetterman of Pennsylvania reacted to the information by posting, “China wins.”

Shares of information heart firms, together with Digital Realty Belief, Vertiv Holdings, and Equinix, dipped on the information, falling as a lot as 2% early Tuesday.

‘No selection however to handle these challenges’

Hochul stated that the AI information facilities require tens of millions of gallons of water, can improve carbon emissions, occupy giant quantities of land, and may emit “disruptive” noise and vibrations for close by residents.

The governor stated that New York has “no selection however to handle these challenges created by these large amenities.”

Moreover, Hochul stated that New York would require information facilities to both produce their very own energy or pay a premium to make use of the state’s electrical grid.

“It is the one method to make sure that our residents and companies have inexpensive vitality that they want, and that our energy capability is already stretched to its restrict, so now we have a lot extra to do,” stated Hochul.

In response to the chief order, Vermont Sen. Bernie Sanders identified on X that his AI information heart moratorium invoice “was referred to as a radical thought” mere months in the past.

“At present, New York turned the primary state to enact a moratorium and a majority of voters nationwide assist it,” Sanders, an unbiased, wrote. “AI should profit ALL of humanity, not only a handful of Large Tech billionaires.”

Hochul stated New York needs AI companies to speculate and develop within the state, however not at the price of its communities and infrastructure. The governor additionally stated she’s aiming to repeal gross sales tax exemptions for large-scale information facilities throughout the state.

Hochul’s govt order is narrower than the AI information heart moratorium invoice handed by the state Legislature final month, making use of solely to amenities with energy calls for of fifty megawatts or extra, reasonably than the invoice’s 20-megawatt threshold.

The governor’s workplace informed Enterprise Insider that it’ll proceed working with the legislature and additional evaluation the invoice referred to as the “Accountable Knowledge Middle Growth Act.”

State Senator Kristen Gonzalez, a sponsor of that invoice, hailed Hochul’s govt order throughout the governor’s press convention, saying that Hochul is “setting the usual that know-how ought to enhance our lives, not pollute our surroundings, pressure our vitality grid, or drive up our utility payments.”

Hochul’s moratorium comes as tech giants race to build massive data centers throughout the US to energy AI applied sciences reminiscent of giant language fashions.

The fast-paced buildout of those information facilities has turn into a flashpoint nationwide, with critics sounding the alarm over vitality demand, water consumption, and the pressure on native infrastructure.