Large technology companies hoping to build energy-hungry artificial intelligence data centers in New York will have to prove that residents will not be left paying the price, Gov. Kathy Hochul said during a roundtable discussion about the nation’s first statewide ban on data center construction.
“I’m not letting these big corporations call the shots in our state,” Hochul told farmers, business leaders, energy experts and local officials on Thursday, two days after announcing the one-year moratorium on new hyperscale data centers.
The temporary ban applies to 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, announced Tuesday, bans certain state environmental permits for up to a year while the state studies the effects of the facilities on energy demand, water and air quality. Projects whose permit applications have already been deemed complete are exempt.
The state intends to set environmental standards for new projects, which will still require state and local approvals. Local governments will retain the authority to decide whether to host 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, the largest U.S. Jewish nonprofit that fights poverty, and a member of Hochul’s AI FutureWorks Commission, told JNS that the order is “really more than a moratorium.”
“No one is saying we shouldn’t have AI or shouldn’t have data centers,” he told JNS. “I don’t think that’s what the governor is saying.”
The facilities were once relatively rare but are now being proposed far more frequently and on a much larger scale than existing regulations anticipated. The pause will give state and local officials time to determine how such facilities should be regulated based on the latest data, according to Greenfield, who has told JNS that he uses artificial intelligence extensively at Met Council.
“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.”
JNS asked Greenfield if the ban would shift the burden of data-center construction onto communities outside of the state, while New York would still benefit from the technology.
“I hope that the other states look at this as an opportunity to also start thinking about thoughtful regulations,” he said. “New York is a tech hub, and I think that part of that responsibility is being thoughtful about how we regulate AI in an intelligent way so that it doesn’t harm people, communities and neighborhoods.”
Like any group, Jews can use AI for “good or for bad,” according to Greenfield, who likened the technology to cars.
“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.’”
“I think that’s really where we are at this stage of AI,” he said. “I think everyone agrees AI has a lot of positives, and I think we want to harness all the positives that AI has.”
U.S. President Donald Trump decried the legislation on Wednesday, calling it a “terrible decision.”
“One of the biggest driving forces in the future for jobs are data centers,” he stated. “They are big, strong, bold and money machines for the state in which they are built. Gov. Kathy Hochul, for political reasons, has terminated all data centers being built or to be built in New York State.”
Hochul responded to the president on social media. If data centers “are really ‘liquid gold,’ then New Yorkers deserve more than scraps.”
“We hit pause, because the communities powering AI should share in its success,” she stated. “Maybe that’s a novel concept in Washington. We call it doing our job.”
The governor’s administration is considering requiring data centers to pay more for electricity, help fund grid upgrades and forgo state sales-tax exemptions, she said on Thursday.
“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,” she said. “They have plenty of money.”
“We’re going to make sure that they do either come with their own energy source,” Hochul said. “Come with your own energy source. No one has done that yet, OK? I’m expecting that, or you have to pay a premium to tap into our limited grid already.”
The state is also developing a framework to help local governments negotiate benefits from data-center developers, including investments in schools, infrastructure and community services.
Didi Barrett, a New York state Assembly member, who chairs the Assembly Energy Committee, said that at least 30 large data centers are seeking connections to the state’s grid. Collectively, those facilities could consume as much electricity as New York City, she said during the roundtable on Thursday.
“This rapid acceleration demonstrates the need to act quickly,” she said. “In New York state, we have an aging grid, and this is going to put tremendous stress on that.”
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.
A main concern is what communities would be left with if the massive facilities were one day deemed unnecessary, according to Hochul.
“I woke up today thinking about my hometown again,” she said. “About the skeleton of the huge Bethlehem Steel plant that went on for a mile over pristine prime waterfront land, forever destroying that. It shut down, maybe 1982. That skeleton is there and it’s still just decaying.”
The image is a “haunting reminder of an industrial past,” she said.
“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.
“That’s not the future I want for New York going further, and that’s also very much on my mind,” she said. “How we manage what happens when the next technologies, the next innovations that say, ‘That’s no longer required.’”
