New York City’s top business advocacy group slammed Gov. Kathy Hochul’s one-year ban on new construction of high-powered data centers in the state, calling it counterproductive and anti-commerce.
Hochul signed an executive order last week enacting a one-year statewide moratorium on new “hyperscale” data centers that need at least 50 megawatts of power to run on, arguing the delay was needed for the state to introduce the centers with care.
But Steve Fulop, CEO of the Partnership for the City of New York — which represents the largest 300 firms in the city, including those from Wall Street and the broader financial services industry — said the move would leave New York behind other states in the AI boom.
“Ultimately, the solution is going to be whether data centers get built or they don’t get built,” Fulop said Sunday on 77 WABC’s “Cats Roundtable” program.
“The signal when you put a moratorium on this sort of stuff … is that it becomes a riskier proposition to put your money into New York versus maybe another state,” he told host John Catsimatidis.
He continued, “It sends a signal about our competitiveness to the private sector. Other states like Pennsylvania … continue to grow, and they haven’t put a moratorium on [data centers]. They work with the communities to find solutions. But they recognize that data centers are important.”
Data centers house thousands of servers, storage drives, and networking equipment used to store, process, and distribute digital information.
Fulop noted that when you seek information on a mobile phone or stream a show, you are interacting with a data center.
“We need more access to data,” he said.
“A one-year moratorium accomplishes nothing. A one-year procrastination or delay doesn’t solve anything.”
New York City also wants to be a leader in emerging artificial intelligence, and supporters say data centers are needed to accomplish that.
The governor defended her one-year freeze — which immediately drew a rebuke from President Trump — on Sunday as the right approach.
She claimed local governments aren’t equipped to negotiate with the Big tech companies on an ad hoc basis.
“The state has to take the lead. We have to get it right,” Hochul said on CBS News’ “Face the Nation” program.
There are 30 pending applications to build data centers in the state, which she referred to as “flooding the zone.”
“There is a huge tax on our [energy] grid. I want to make sure the power is there for the large companies creating jobs,” Hochul said.
“New Yorkers want protection; there’s a lot of anxiety. Companies want certainty. We’ll give them both.”
The governor insisted her moratorium is not anti-business or anti-union, defending her record in bringing in jobs and building projects.
But the construction trades oppose the one-year ban, and critics have argued Hochul caved to the political left — including lawmakers with ties to the Democratic Socialists of America — who’ve pushed against data centers serving Big Tech.
“Technology should make our lives better, not pollute our water, strain our energy grid, or drive up our utility bills,” state Sen. Kristen Gonzalez, a DSA member who reps parts of Queens, Manhattan and Brooklyn, said last week.
New York Republican gubernatorial candidate Bruce Blakeman — who supports data-center industry expansion — accused Hochul of backing the moratorium because she thinks it’ll score her political capital with the far left.
“Kathy Hochul will always put the interests of [New York City Mayor] Zohran Mamdani and big-government socialists ahead of New Yorkers, even if it means blocking economic opportunity while families struggle under the nation’s highest taxes and utility bills,” he said.
Hochul’s team insisted her decision was not tied to politics or her re-election campaign.