New York Bans Data Centers

New York Governor Kathy Hochul signed an executive order this week imposing a moratorium of up to a year on new data centers using 50 or more megawatts of power, making New York the first state in the US to ban large-scale data center construction. The stated rationale is consumer protection, as utility prices in New York have risen nearly 15% year over year, and a recent poll found 46% of voters support the moratorium. President Trump responded on Truth Social, demanding the state reverse the decision “IMMEDIATELY,” calling data centers “Money Machines for the State in which they are built.”

New York’s ban arrives as a national backlash against data center power and water consumption has been building ahead of midterm elections, with Democratic politicians increasingly blaming the AI buildout for unaffordability rather than praising it as an economic opportunity. Meanwhile, the US currently accounts for roughly 75% of global AI compute capacity compared to China’s 15%, a lead that represents the primary theoretical advantage American labs hold over Chinese competitors. As the Kimi K3 release this week shows, China’s frontier models are already closing the capability gap despite compute constraints from US export controls. A state-level moratorium on data center construction further erodes the efficacy of export controls by voluntarily kneecapping domestic compute capacity just as the AI race tightens. As The Free Press noted, there are no equivalent data center moratoriums in China.