New York Gov. Kathy Hochul became the first statewide politician to rein in artificial intelligence companies by signing an executive order that forces them to pause construction of large data centers for at least a year.
According to the New York Times, the moratorium will allow the state to develop a regulatory framework to evaluate how so-called hyperscale data centers — which use 50 or more megawatts of power to operate — affect the environment. As AI companies snatch up property across the country to build behemoth data centers, critics argue they are a drain on the electric grid and guzzle up valuable resources.
The first-of-its-kind legislation will temporarily ban the state from approving permits for the data centers and require the centers to pay into a state fund to help with electrical grid improvements. Hochul, a Democrat, also wants to take away the centers’ tax subsidies.
“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 said in a statement, adding that companies that can build life-changing technology can also take steps to protect the power grid and water supply.
The order is a signal to Big Tech that, despite their unchecked freedom at the federal level to build these centers, states can step in to regulate them.
Republicans and Democrats alike oppose the construction of data centers when electricity costs are skyrocketing, but similar proposals to issue moratoriums have been shot down by the Democratic governors of Maine, Michigan and California. The only other region that has passed a bill to halt development is the Seminole Nation for its tribe lands in Oklahoma.
Advocates such as Laura Shindell, the New York State director at environmental nonprofit Food & Water Watch, lauded Hochul’s landmark legislation, which takes effect immediately.
The executive order “comes as the direct result of immense public pressure from people across the state demanding their elected leaders protect them from Big Tech’s assault, which threatens the state’s clean air and water and New Yorkers’ financial security,” Shindell told the Times.