"Massive data centers are being built across our state and our country. The scale and speed of this development has put unprecedented demand on energy and water resources, and threatens to drive up utility costs. Before it goes any further, I need safeguards in place to protect New Yorkers," Hochul said in a social media post.
Hyperscale data centers typically house thousands of servers and consume 50 megawatts or more of power while relying on a continuous water supply for cooling. Hochul said New York will continue to welcome AI investment but expects companies to meet new standards designed to protect local communities and public resources.
"But when you benefit from the talent and energy of New York, we expect you to protect our resources and give back to our communities," Hochul said.
The executive order directs the Department of Public Service to create guidelines that establish consistent requirements for future data center projects. Hochul also said operators will be required to either generate their own electricity or pay a premium to access New York's power grid. In addition, she said she opposes tax subsidies for AI data centers.
"The bottom line is progress shouldn't arrive with a higher utility bill, depleted water supplies, or noise pollution. So we have no choice but to address these challenges created by these massive facilities," Hochul said.
State officials expect the rulemaking process to take up to a year. Once the standards are completed, the moratorium will be lifted.
The executive order applies to projects above 50 megawatts, although a separate bill passed by state lawmakers would lower that threshold to 20 megawatts if signed into law. Hochul has not announced whether she will approve the legislation.
Supporters of the temporary pause argued that additional safeguards are needed before large-scale projects continue moving forward.
"This one-year moratorium is fundamentally about trust. Right now, New Yorkers aren't convinced these massive facilities benefit them. Before we move forward, our communities need ironclad guarantees that their energy bills won't spike, their water will be protected, and their air will remain clean," Sen. Kirsten Gillibrand said.
Gillibrand also called for broader federal oversight of AI.
"That requires establishing clear, reliable rules of the road. We must build a framework that protects our kids from harmful algorithms and social media tools; shields seniors and consumers from AI-driven scams and fraud; and safeguards American jobs and livelihoods from displacement," she said.
Construction industry groups criticized the decision, arguing that delaying permits could drive projects to other states.
"A shortsighted moratorium only accomplishes one thing: it kills good-paying union jobs. Rather than implementing guardrails to build the future of American ingenuity, Governor Hochul is taking her ball and going home. We urge the governor to work with all parties, including the hardworking New Yorkers whose jobs are at stake, to implement common sense guardrails," said Mark McManus, general president of the United Association of Union Plumbers and Pipefitters.
The Associated General Contractors of New York State also opposed the moratorium, calling it "the wrong policy for New York."
"Halting permits for as much as a year in this fast-moving sector will not simply delay projects—it will send them permanently to Virginia, Texas, Georgia and other states actively competing for these investments and the construction and other jobs that come with them. Once a developer breaks ground somewhere else, that project—and the opportunities and tax revenue that come with it—are not coming back," said AGS NYS President and CEO Mike Elmendorf.
Elmendorf added that data center construction remains one of the strongest-performing segments of the construction industry and described the moratorium as "a de facto ban that tells the marketplace New York is closed for business."
This analysis is based on reporting from CBS News.
Image courtesy of Microsoft.
This article was generated with AI assistance and reviewed for accuracy and quality.
