Hochul uses AI to cut red tape after New York data center moratorium

Governor Kathy Hochul paired New York’s one-year moratorium on new hyperscale data centers with a push to use artificial intelligence inside state government, saying her team is using AI to analyze “every single rule, regulation, [and] policy” for outdated requirements. The move places her administration on both sides of the state’s AI debate, encouraging the technology as a tool for efficiency while slowing the infrastructure that supports it.

Hochul announced the pause on July 14 and called it the nation’s first statewide moratorium on new large data center projects. Executive Order No. 62 puts the freeze on new hyperscale data centers for one year while the state assesses environmental and energy impacts, and Hochul’s office said the goal is to protect ratepayers, the environment, and New Yorkers.

The administration says the pause is designed to create higher standards for data center development and a benefits blueprint for localities that host the projects. That framing links the moratorium to a broader regulatory reset, not just a temporary construction slowdown, as state officials try to write rules that can handle the size and power demands of modern AI infrastructure.

Hochul’s AI review of state rules is part of that same cleanup effort. She said the administration wants to eliminate or modernize antiquated requirements and is looking at whether task forces or councils could help strip out red tape, modernize agencies, and make the regulatory system easier to navigate.

The policy arrives amid mounting concern over the energy and water needs of AI data centers and the pressure those facilities can place on the electric grid. Critics in the technology and business world have warned that freezing the largest projects could send a signal that New York is a poor place for long-term AI investment, even as Hochul continues to argue that the state can still court AI growth while imposing tighter controls on the buildout behind it.