In the meantime, Hochul said it was her “responsibility to take action and lead,” as “data center development threatens to ⁠hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers.”

“New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too,” Hochul said in a statement.

NY threatens to repeal tax giveaways

Possibly providing a blueprint for other statewide bans, New York’s bold anti-AI stance was viewed as “a striking setback for artificial intelligence companies that politicians once courted for investment,” the Post reported. It comes after Maine’s governor vetoed a prior statewide effort to temporarily ban construction out of concerns that Maine’s legislation didn’t exempt a favored project already underway.

Hochul is clearly taking a firmer stance against massive projects concerning New Yorkers. Although her office insists that she isn’t anti-AI, she believes that she must take steps to ensure responsible growth of the industry in New York, where electricity prices are among the highest in the US. On Tuesday, Hochul indicated that she also planned to repeal sales tax exemptions for data centers, which could influence other states that, prior to the AI backlash from constituents, leveraged the tax giveaways to lure investments from the AI industry.

In New York, Hochul has suggested that old incentives and voluntary commitments that AI firms previously relied on to strike deals with officials were no longer enough. States need more information to assess whether residents will be protected from potentially harmful projects.

Hochul had already moved to ensure that data centers don’t force residents to pay higher prices as energy demand in the area skyrockets. In February, Hochul announced a plan to ensure data centers pay their “fair share” for energy grid updates, which she said would set a “simple standard” to “ensure everyday New Yorkers do not subsidize this energy-intensive industry.”

“These industries must pay more; if they do not, they must supply their own energy,” Hochul’s office said in a press release.

The moratorium shows that New York is serious about mulling how to set higher standards for data center construction, but the greatest immediate impact of the moratorium may be the momentum it gives to the anti-AI movement by signaling that stopping all construction in a state is possible.