US-China rivalry is increasingly being played out at home – in America's own backyard – as former President Donald Trump wades into the high-stakes debate over New York's AI-fuelled datacentres. The facilities, which are crucial for powering artificial intelligence technologies, have become a flashpoint in the US economy, with environmental concerns pitted against fears of economic stagnation.
New York has just become the first US state to impose a moratorium on 'hyperscale' datacentres, following Governor Kathy Hochul's executive order mandating a one-year pause. In response, Trump labelled the decision 'terrible' and demanded that Hochul revoke it 'IMMEDIATELY', suggesting the ban was driven by politics rather than sound economic judgement.
The executive order directs state regulators to develop comprehensive standards to mitigate the environmental impact of these substantial projects. Governor Hochul has stated that the pause will allow New York to establish a robust framework, safeguarding communities from risks to the energy grid, minimising land disruption and noise pollution, and protecting natural resources – particularly water supplies.
While pursuing a deregulatory agenda concerning AI during his current term, Trump did concede on Wednesday that datacentres should bear the costs for their own water and power, rather than relying on historical tax breaks. He warned that the policy would cause datacentres and AI investment to shift to other states, including 'Red States' and some 'Blue' ones, which he described as viewing these facilities as 'Cash Cows', offering lower taxes and substantial job creation.
The appetite for datacentre moratoriums is reportedly increasing across the United States, driven by growing public anger over the facilities' effects on local energy prices and the environment. A recent Heatmap poll indicated that almost three-quarters of Americans oppose the construction of a datacentre near their homes, reflecting widespread concerns about potential increases in utility bills and negative environmental consequences. Over a dozen states have reportedly considered similar moratoria, with Seattle approving its own one-year ban on datacentre development last month, making it the largest city to implement such a measure.