On Tuesday, July 15th, 2026, New York became the first U.S. state to impose a one-year moratorium on the construction of new hyperscale datacenters, facilities critical for powering artificial intelligence (AI) technologies. The pause was enacted through an executive order signed by Governor Kathy Hochul, aiming to develop a robust framework to safeguard the energy grid, reduce environmental impacts such as land disruption and noise pollution, and protect vital resources, particularly the state’s water supply.

Governor Hochul stated at a press conference, “This pause will remain in place for up to one year while New York establishes the strongest possible framework to protect our community’s guardrails to reduce the risk to our energy grid, minimize land disruption, noise pollution and protect our national resources, especially our water supply.”

Former President Donald Trump sharply criticized the decision on his Truth Social platform, calling it “a terrible decision” and accusing Hochul of implementing the ban for purely political reasons. He urged the governor to scrap the policy “IMMEDIATELY.” Trump emphasized the economic importance of datacenters, describing them as “big, strong, bold, and Money Machines for the State in which they are built.” He highlighted datacenters as major drivers of future jobs and income, referring to the associated taxes and employment as “LIQUID GOLD.”

Trump also noted that the economic benefits of datacenters have primarily gone to states with lower taxes, calling them “Cash Cows” that deliver “tremendous WINS” for those states fortunate enough to attract them. He warned that the actions of “major left democrats” could lead the U.S. to lose datacenters and AI development to China.

While pursuing a deregulatory agenda on AI during his second term, Trump stated that datacenters should cover their own water and power costs rather than receiving tax breaks as they have in the past.

Sources