New York Governor Kathy Hochul said artificial intelligence-driven data centers can bring "tremendous benefits" to some communities, signaling a potential path forward for the industry in the state despite a yearlong moratorium on new hyperscale facilities. New York is working to develop the strongest framework in the nation for data center development to address concerns over energy, electrical use and tax breaks, the governor said. She is already advising communities to ask for $1 million per megawatt.
"This is a local decision. I'm just trying to help them understand the power they have," Hochul said. "The community has the right and obligation to decide," Hochul said.
"There are plenty of communities that say 'The welcome mat is not out for you." Data centers have become a major political issue across the United States as technology companies race to build infrastructure to support growing demand for artificial intelligence. New York officials have repeatedly warned that large facilities could significantly increase electricity demand and place pressure on the state's energy system. When announcing the moratorium in July, Hochul said the state needed time to study the industry's potential effects on utility bills, environmental resources and the electric grid.
According to reporting by CNBC, voter opposition to data center development has grown alongside concerns about rising electricity costs and questions surrounding the broader economic effects of AI technologies. State officials have pointed to concerns involving electricity consumption, water usage, noise, land use and infrastructure demands as reasons for pursuing a more comprehensive regulatory framework before allowing additional hyperscale projects to proceed. The moratorium, which pauses permits for large facilities while those rules are developed, was presented by the governor as a temporary measure rather than a permanent ban.
Representative Alexandria Ocasio-Cortez, a New York Democrat, said she introduced a federal AI moratorium to make sure data centers are paying their fair share. "It shouldn't just be New Yorkers that have their water, and their energy and air protected," Ocasio-Cortez said. "There should be rights available to every American." In July, Hochul announced what her office described as the nation's first statewide moratorium on new hyperscale data centers, arguing that rapidly growing electricity demand from artificial intelligence threatened to strain New York's power grid, increase costs for consumers and create environmental challenges.
Newsweek reached out to her office Tuesday for additional comment. In September, Hochul said large AI facilities "consume enormous amounts of power" and risked outpacing the state's electrical capacity. She also argued New Yorkers should not be required to absorb infrastructure costs associated with data center expansion.
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