New York Gov. Kathy Hochul announces moratorium on data centers
New York Gov. Kathy Hochul is ordering a moratorium on AI data centers in her state.
The governor announced the news in a press conference Tuesday morning in New York City, describing an immediate need to address the strain on resources posed by AI data centers.
"That is why today I'll be signing the nation's first-ever statewide moratorium on hyperscale data centers," she said.
Hyperscale data centers provide the computing power necessary to process large amounts of data, such as the kind needed to run AI systems. They typically house thousands of computer servers and require tremendous amounts of land, water for cooling, and energy, potentially straining local power grids, while employing few workers long-term, relative to their size.
Hochul said Tuesday that the hyperscale centers' strain on resources could become a burden on New Yorkers.
"These hyperscale AI data centers consume enormous amounts of power, truly threatening to outpace our grid's capacity, and they drive up costs for local ratepayers," she said.
She added, "I refuse to let those costs be passed on to New Yorkers who already pay too much for their utility bills."
New York pays the fourth highest amount for energy of all states in the nation, according to Empire Center, a nonprofit think tank focusing on public policy, which also found that in April 2026, New Yorkers paid 56% above the national average on price per kilowatt-hour.
Hochul said the moratorium will remain in place for up to one year "while New York establishes the strongest possible framework to protect our communities' guardrails, to reduce the risk to our energy grid, minimize land disruption, noise pollution, and protect our natural resources, especially our water supply."
Hochul said the moratorium will be lifted once her government is able to execute on a policy that sees AI companies helping foot some of the growing energy bills.
"We're going to explore having hyperscale data centers pay on to a larger fund to support our grid statewide," she said. "We expect this process, which we already launched, to be completed within the year. Once this policy is in place, the moratorium will be reviewed and lifted."
Hochul said part of her plan is to ensure that data centers are only built "in places that want them," so they will not be exempt from local zoning and approvals.
Additionally, she said she hopes to include labor issues in discussions with data centers hoping to build in New York. "Projects can include wage standards and labor agreements, and prioritize local hiring," she said.
Finally, Hochul said part of her plan will include a proposal to end tax subsidies for data centers.
She acknowledged that New York has historically welcomed new tech, is ready to embrace AI, and does not fear emerging technology.
"People aren't afraid of technology, they're just afraid of being left behind by it," she said.
Tuesday's order comes one month after the New York Legislature passed a bill that would impose a one-year moratorium on issuing data center permits, require utility companies to "establish an independent classification of service for large data centers," set energy efficiency goals for those centers, and set labor standards for their construction, according to the legislation's text.
State Sen. Kristen Gonzalez, who sponsored the bill, spoke at Hochul's executive order announcement on Tuesday.
"Good tech policy is founded on the principle that technology should make our lives easier, not harder, and good government means collaborating, balancing interests, and delivering real wins for New Yorkers," she said. "Today's executive order establishing the first in the nation-statewide data center moratorium shows what is possible when we take both of these principles seriously."
Later on Tuesday, Hochul joined ABC News Live anchor Kyra Phillips to discuss the moratorium and why she felt now was the right time for it.
She said the moratorium is indicative that "New York doesn't just want to be first, we want to be the first to get it right."
That means making sure companies cover their power costs by either bringing their own power or "pay a premium" to use the grid, Hochul said.
The governor also discussed the more aggressive bill passed by New York legislature, which she has yet to sign.
"Well, I'm looking at that. I have hundreds and hundreds of bills you have to review before the end of the year," she said, adding that she wants to ensure data centers that support research, universities and health care organizations are not impacted.
Hochul said her order specifically applies to data centers with capacities larger than 50 megawatts.
Hochul also responded to critics of AI moratoriums, who have argued that by slowing AI companies, the U.S. is handing an advantage to foreign competitors like China.
"We're doing it in a smart way," she said. "Other states should follow our lead. We're going to get it right in New York. That's what we always do. Happy to lead, but leading in a way that's going to have benefits for our communities."
