Albany, NY — Following Governor Kathy Hochul’s executive order today creating the nation’s first statewide pause on new hyperscale data center development, the American Economic Liberties Project issued the following statement:

“New York is taking an essential step to make sure the rapid growth of data centers does not come at the expense of families and communities,” said Pat Garofalo, Director of State & Local Policy at American Economic Liberties Project. “For years, Big Tech companies have negotiated data center deals behind closed doors, securing enormous public benefits while leaving residents high and dry to absorb the costs, including higher energy demand, pressure on local infrastructure, and increased strain on natural resources. Before more projects move forward, communities deserve a clear picture of what these facilities will cost and who will pay.”

“This moratorium creates an opportunity to build rules that put the public interest first,” Garofalo continued. “Companies driving the AI boom should be responsible for the infrastructure they require, without ratepayers footing the bill. New York can set an example by ensuring local development brings real benefits to communities rather than more corporate giveaways.”

Governor Hochul’s executive order temporarily halts state permitting for new large-scale data centers while regulators develop a framework addressing their impacts on electricity demand, water use, and environmental conditions. The order also directs state officials to explore measures requiring data center developers to contribute to grid investments and establish clearer community benefit standards.

Across the country, Big Tech companies are rapidly expanding data center infrastructure to power artificial intelligence, but many communities have raised concerns that these projects can come with significant public costs — increased energy demand, higher utility bills, and the depletion of local resources — while receiving substantial taxpayer-funded incentives and limited public scrutiny. If the AI boom proves to be a financial bubble, it would saddle many communities with stranded assets that they had spent millions of dollars subsidizing, often through secret deals.

Economic Liberties’ analysis, “How to Rein in Big Tech’s Secret Data Center Deals,” outlines steps states and local governments can take to bring transparency and accountability to data center development, including ending secretive agreements, limiting corporate subsidies, and requiring disclosure of energy and water impacts.

Read our breakdown of Big Tech’s secret data center deals here.

Learn more about Economic Liberties here.