Kathy Hochul signed the executive order on Tuesday. Donald Trump was demanding she undo it by Wednesday.
The order pauses construction of new data centres drawing 50 megawatts or more for up to a year, making New York the first US state to pull the brake on the buildings powering the AI boom.
State officials are to produce a Generic Environmental Impact Statement in the meantime, and the freeze lifts once those standards are set.
Trump took to Truth Social to call it a “terrible decision” that would hand investment, tax revenue, and jobs to states that want them. “One of the biggest Driving Forces in the Future for Jobs, are Data Centers,” he wrote, describing them as “Money Machines” for the states that host them.
Projects would now go to Texas, Florida, Alabama, and Arizona, he argued, where “Both the Taxes and the Jobs amount to LIQUID GOLD!” He told New York to reverse course “IMMEDIATELY”, warning the US should not risk losing AI leadership “to China, and other countries”.
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Kathy Hochul answered on X the same day, and took his own phrase off him. “If data centers are really ‘LIQUID GOLD’, then New Yorkers deserve more than scraps,” she wrote.
“We hit pause because the communities powering AI should share in its success,” she added. “Maybe that’s a novel concept in Washington. We call it doing our job.”
Her case for the order rests on utility bills, water, and the fact that the costs of these facilities land on the towns that host them while the returns mostly do not.
A Georgia Tech study released last week found that data centre gains are unevenly distributed, with metropolitan counties capturing most of the benefit while rural communities host the buildings and absorb higher electricity bills.
The financial stakes explain the volume. US data centre lease commitments passed $850bn in the first quarter of 2026, a record. Against that, a one-year pause in a single state is small, and the reaction has been disproportionate to it.
Bill Ackman reached for the same China argument the president did. “China is not putting moratoriums on data centers,” he wrote.
“The race for super intelligence needs to be won by the USA or our country and democracy will be at risk.” Anthony Pompliano called the policy “about as dumb of a public policy as you could come up with”.
Alexandria Ocasio-Cortez went the other way, thanking Hochul and arguing a moratorium buys lawmakers time to write strong protections and ensure AI “benefits all of us, not just a powerful few”.
What is striking is how little of the exchange is about New York. Trump’s post is a threat to other governors as much as a complaint about this one, and it arrives alongside a broader federal campaign to preempt state AI regulation, using a DOJ litigation task force and a push for a national standard.
That campaign has not gone well. The Senate voted 99 to 1 to strip the preemption provision.
There is also an awkward wrinkle. The administration’s own executive order on preemption carved out data centre zoning authority as a state matter, which is close to describing exactly what Hochul just did.
And she is not the outlier the framing suggests. Local opposition delayed or blocked at least 75 US data centre projects worth about $130bn in the first quarter alone, none of it requiring a governor. Denmark has paused grid connections.
New York is the first state to write the resistance into an executive order, not the first place to resist.
The order stands. Trump has no mechanism to lift it, Hochul has shown no sign of wanting to, and the Generic Environmental Impact Statement will take as long as it takes.
