President Donald Trump publicly attacked New York Governor Kathy Hochul on Wednesday, July 15, over her decision to temporarily halt new large-scale data center development in New York, calling the move a “terrible decision” in a post on Truth Social and urging the state to reverse course immediately.

“Both the Taxes and the Jobs amount to LIQUID GOLD!” Trump wrote, arguing New York was driving away billions of dollars in investment and thousands of high-paying jobs.

The criticism came just one day after Hochul signed an Executive Order establishing what her administration described as the nation’s first statewide moratorium on new hyperscale data centers while regulators develop new standards governing electricity demand, environmental impacts, water usage and community protections.

“As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” Hochul said in announcing the order.

What the Executive Order Does

The Executive Order immediately pauses state environmental permitting for new hyperscale data centers requiring 50 megawatts or more of electricity for up to one year, giving state agencies until July 2027 to develop a comprehensive regulatory framework.

During the moratorium, New York will prepare a Generic Environmental Impact Statement evaluating the industry’s effects on electricity demand, water consumption, air quality and surrounding communities.

Within 60 days, Empire State Development must also publish a Community Investment Framework designed to help municipalities negotiate community benefit agreements with developers. Those negotiations could include infrastructure improvements, childcare investments, workforce development and direct financial contributions.

Hochul also directed state agencies to explore requiring large data centers to contribute toward electric grid upgrades and said she intends to support repealing an existing sales tax exemption benefiting large facilities, subject to legislative approval.

Why Hochul Took Action

The governor argued that rapid growth in energy-intensive artificial intelligence infrastructure threatens to increase electricity costs for residential customers.

According to the governor’s office, average residential electricity prices in New York have increased nearly 68 percent since 2019.

A Siena College Research Institute poll conducted in June found 46 percent of New Yorkers support a one-year pause on permitting large data centers, while 21 percent oppose the proposal. The survey found majority support among both Democrats and Republicans.

The same poll showed Hochul holding a significant lead over likely Republican gubernatorial challenger Bruce Blakeman, Nassau County Executive.

Industry Pushback

The Data Center Coalition, representing many of the nation’s largest technology companies, sharply criticized the Executive Order.

“Gov. Hochul’s statewide moratorium on data centers will ensure that those investments, jobs, and economic activity flow elsewhere rather than to New York,” said Dan Diorio, the organization’s Executive Vice President for State Policy and Government Affairs.

The coalition argued that modern data centers generate substantial construction activity, long-term tax revenue and support growing artificial intelligence infrastructure.

Supporters of the pause disagreed.

Laura Shindell, New York State Director for Food & Water Watch, called the Executive Order an important step toward protecting communities from uncontrolled development.

State Assemblymember Didi Barrett said residents deserve a better understanding of how rapidly expanding data centers affect local infrastructure, natural resources and electricity prices before additional projects move forward.

What Comes Next

The Executive Order differs from legislation already passed by the New York Legislature.

Lawmakers previously approved the Responsible Data Center Development Act, which would impose a one-year moratorium on facilities consuming 20 megawatts or more, establish separate electric and water rate classes for large data centers and require public hearings before project approval.

Hochul has not signed that legislation, saying additional negotiations with lawmakers remain necessary while her Executive Order provides immediate action.

New York joins a growing number of states reassessing incentives for large data center development.

Earlier this year, Maine Governor Janet Mills vetoed a proposed moratorium because it failed to exempt projects already underway, while Arizona Governor Katie Hobbs signed legislation establishing a three-year pause on new sales tax incentives for data centers.

The timing is significant.

Regional grid operator PJM Interconnection is currently operating under Maximum Generation and Hot Weather Alerts amid record electricity demand. PJM’s most recent capacity auction cleared at a record $333.44 per megawatt-day, with independent market monitor Monitoring Analytics attributing roughly 63 percent of the increase to growing data center electricity demand.

The political fight between Trump and Hochul ultimately centers on a broader national question: how to balance artificial intelligence investment, economic development and rising electricity costs as data centers consume ever-larger amounts of power.

JBizNews Desk | New York

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