Large technology companies planning to build energy-intensive artificial intelligence data centers in New York will need to show that the cost will not fall on residents, Governor Kathy Hochul said during a discussion about the state's first statewide moratorium on such construction.
"I'm not letting these big corporations call the shots in our state," Hochul told farmers, business leaders, energy experts and local officials Thursday, two days after announcing the one-year ban on new hyperscale data centers.
The moratorium covers new facilities requiring at least 50 megawatts of electricity. "We welcome you. We want to benefit from your success, but you also make sure all New Yorkers are successful as well in the process," She said. "That's how we do things in New York."
The executive order, issued Tuesday, suspends certain state environmental permits for up to a year while the state examines the facilities' impact on energy demand, water and air quality. Projects with completed permit applications are exempted.
The state plans to establish environmental standards for future projects, which will still need state and local approval. Municipalities will retain authority over whether to allow the facilities.
"This is not hostility to the technology behind it," Hochul said, "but it is simply saying, 'We want to take a pause. We want to step back and make sure that New York is not only just first, but we're the first to get it right.'"
David Greenfield, CEO of Met Council and a member of Hochul's AI FutureWorks Commission, described the order as "really more than a moratorium." He said the facilities were once uncommon but are now proposed far more frequently and at larger scales than existing regulations anticipated. "The rules that they've been using to build these data centers were not intended for these kinds of data centers," He said. "Now they're happening very frequently, and they're having unintended consequences."
When asked whether the ban would shift construction burden to other states while New York still benefits from the technology, Greenfield said, "I hope that the other states look at this as an opportunity to also start thinking about thoughtful regulations."
He compared artificial intelligence regulation to automotive safety. "We can't think of our lives without cars, but the reality is that every day, hundreds of people die in car accidents," He said. "The answer is not to say that we're not going to have any cars. The answer is to say, 'OK. We're going to regulate cars. There are going to be things called seat belts. There are going to be things called airbags.'"
President Donald Trump criticized the action on Wednesday, calling it a "terrible decision" And stating that data centers are "big, strong, bold and money machines for the state in which they are built." He claimed Hochul had "terminated all data centers being built or to be built in New York State."
Hochul responded via social media. If data centers "are really 'liquid gold,' then New Yorkers deserve more than scraps." She added, "We hit pause, because the communities powering AI should share in its success. Maybe that's a novel concept in Washington. We call it doing our job."
The state is considering requiring data centers to pay premium electricity rates, help fund grid upgrades and forfeit state sales-tax exemptions. "If you want to take advantage and benefit from our natural resources, our land, our talent, then we should not be using taxpayer dollars to support that effort," Hochul said. "We're going to make sure that they do either come with their own energy source" Or "pay a premium to tap into our limited grid already."
The state is also developing a framework to help local governments negotiate benefits from developers, including investments in schools, infrastructure and community services.
State Assembly member Didi Barrett said at least 30 large data centers are seeking grid connections. Those facilities could collectively consume as much electricity as New York City, she said during Thursday's roundtable. A proposed Grid Acceleration Fund "will identify grid infrastructure improvements and require large-scale data centers to invest in new dedicated clean electric generation and battery storage," She said.
Hochul also expressed concern about communities left behind if the facilities eventually become obsolete, referencing the abandoned Bethlehem Steel plant in her hometown. "When a company takes up that space and the water and consumes our resources, then turns out the lights and walks away one day, communities are left with this," She said.