NY Post: Kathy’s A.I. K.O. Nix on building new data centers

July 15th, 2026

She’s zapping data centers – for now.

Gov. Hochul on Tuesday issued a first-in-the-nation ban on large-scale data centers in the Empire State – a moratorium that managed to tick off both supporters and opponents of the artificial intelligence projects.

The executive order Hochul signed will pause new permits for so-called “hyperscale” data centers trying to tap into New York’s electrical grid for up to a year – after the gubernatorial race this fall in which she’s running for re-election.

Hochul argued she pursued a middle-ground course between protecting the state – and its already-strained power grid – and helping to incubate the rapidly developing AI industry.

“I don’t want New York to just be first. I want New York to be first in the right way,” she said during a news conference in Brooklyn touting the ban.

But Hochul’s unilateral, election-year move accomplished a rare feat: uniting groups that are sharply divided over data centers in shared dislike for her solution.

Business and tech groups warned that she risked jeopardizing jobs and economic development, arguing companies will be forced to move data centers elsewhere – leaving New York in the dust as the AI industry expands.

The Data Center Coalition argued the yearlong moratorium would “undermine New York’s economy and send a signal that the state is closed for business.”

Dem ire

“While states like Virginia and Texas are far more likely to be approached by possible developers, the fact of the matter is that a statewide moratorium strips away local control and a community’s ability to decide on projects that could be pivotal to their economic growth and job creation,” said Justin Wilcox, executive director for the upstate New York business group Upstate United.

“We simply cannot claim to be a state at the forefront of AI innovation if we preemptively turn down opportunities that would help ensure that to be true.”

Data centers could end up becoming a windfall for many upstate counties stuck in a long economic decline, outlined in vivid detail by a shocking new Citizens Budget Commission report released Monday.

The CBC report specifically found areas like the North Country, Southern Tier, and Central New York continue to see population decline, job growth below the national average and tepid GDP growth.

But Hochul’s fellow Dems in the state Legislature fumed that she had snubbed their legislation setting a more-restrictive moratorium than the one-year pause.

Demand for data centers – massive, computer-packed complexes – exploded in recent years with the rise of AI and other high-intensity services.

But the centers also spurred a nationwide backlash, with skeptics in arms over their electricity and water requirements – as well as the tax breaks they often receive.

Roughly half of New York voters polled by Siena University last month said they believed a one-year moratorium on large data centers was good for the state, while 21% said they thought it was a bad idea and 17% indicated they were somewhere in the middle.