On Wednesday, former President Donald Trump took to social media to criticize New York Governor Kathy Hochul's executive order that temporarily halts environmental permits for large data centers, labeling it a "terrible decision" and demanding the state reverse its stance immediately. He wrote that the tax revenue and jobs generated by data centers are "liquid gold," a "huge win" that states and communities can hardly hope to come by.
Hochul swiftly responded on social media, stating that "communities powering AI should share in its benefits," and countered: "If data centers are truly 'liquid gold,' should New Yorkers only get the scraps?"
Hedge fund billionaire Dan Loeb also harshly criticized the decision on social media, calling it "the dumbest decision since the Amazon HQ2 debacle," and warned it would drive away billions in investment and send tens of thousands of jobs to Republican-led states.
Hochul signed the executive order on Tuesday, announcing a pause of up to one year on issuing environmental permits for new large-scale data centers, allowing New York time to develop a regulatory framework to prevent data centers from driving up electricity costs and straining water resources.
Energy Cost Pressures: The Immediate Catalyst for New York's Pause
Behind Hochul's executive order lies the sharp rise in energy costs triggered by data center expansion.
According to data compiled by Bloomberg, wholesale electricity prices in the Buffalo region of New York for 2025 have surged 197% compared to five years ago. This trend is not unique to New York—electricity costs across many parts of the U.S. have hit record highs due to the large-scale construction of energy-intensive data centers, causing significant strain on consumers.
In an interview with Bloomberg's Odd Lots podcast, Hochul stated she aims to use this pause to address public discontent over energy costs while providing businesses with clear regulatory guidelines.
She emphasized: "I understand the importance of AI. We are in the midst of a revolution. The wave of change is coming with hurricane force. It will be disruptive, but ultimately it will also create enormous value."
New York's AI Infrastructure Landscape: 148 Data Centers
According to a Pew Research Center report from April this year, New York State currently has 148 operational data centers, ranking fifth among all U.S. states. Nationwide, there are over 3,000 operational data centers, with approximately 1,500 more under construction.
For businesses, New York remains an important destination; however, this pause undoubtedly adds uncertainty to new project approvals in the short term.
Hochul faces a dilemma: on one hand, she needs to demonstrate New York's appeal to large corporations, and on the other, she must contend with the pressures of the gubernatorial election next November and voters' genuine concerns about the community impacts of data centers.
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