New York poised to become first US state to ban large datacenters

The New York Datacenter Moratorium

New York moved closer toward becoming the first US state to enact a moratorium on large datacenters this week. On Thursday, the state legislature approved a one-year ban on the facilities powering the AI boom.

How Would New York's Temporary Ban on Datacenters Work?

The moratorium largely targets datacenters built by 'tech goliaths' and will not apply to facilities already possessing the necessary state permits. The bill would also require an environmental impact report, which would document water and electricity usage, as well as new labor, energy efficiency and transparency standards, and ratepayer protections aimed at keeping New Yorkers' energy bills low.

A Part of a Nationwide Pushback

More than a dozen US states have considered moratoria in response to residents' fears about the potential costs of living next to datacenters, especially higher utility bills and negative environmental impacts. The Data Center Coalition, a trade association that has championed the expansion of these facilities, worries that a statewide moratorium would 'discourage further investment, undermine New York's economy, and send a signal that the state is closed for business'.

The Scene in Albany

In Thursday's debate on the legislative floor in the state capital of Albany, lawmakers against the ban echoed industry worries that it was a one-size-fits-all measure that would stifle economic growth and supersede local control. Kristen Gonzalez, a New York state senator and co-author of the bill, disagrees with that approach, saying 'It's an abdication of our responsibility to ask a local government to engage and take on the wealthiest companies in the world. That is what state government is for.'