NY Governor Kathy Hochul on Her One Year Data Center Moratorium

**SPEAKER_2** (0:02)
Bloomberg Audio Studios, podcasts, radio, news.

**Joe Weisenthal** (0:18)
Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

**Tracy Alloway** (0:23)
And I'm Tracy Alloway.

**Joe Weisenthal** (0:24)
So Tracy, big news in New York State today. We know there's been a lot of AI politics, a lot of data center backlash. I wasn't really expecting it, but New York State becoming the first state to institute a formal data center moratorium, at least for one year.

**Tracy Alloway** (0:41)
Yeah, so this is really interesting. Governor Kathy Hochul just announced this, and it comes hot on the heels of, there was another attempt in Maine to do something similar, but that ultimately got vetoed by the governor there. So it's really interesting that New York is, I guess, stepping up and maybe trying to create a template for other states to do this.

**Joe Weisenthal** (1:01)
Yeah, and it's interesting because the one question is, does this become a ban? Because we know there are a lot of people that would just like to see, anti-data center politics is very popular. On the other hand, it's interesting, I saw a story, I saw a headline recently, in some states, there are still tax breaks, they're trying to invite data center companies in.

**Tracy Alloway** (1:23)
New York still has tax breaks too.

**Joe Weisenthal** (1:25)
Yeah, and so it's interesting because we see all these stories about, oh, there's a compute scarcity, et cetera, and yet evidently, there's still this competition. But basically, data center politics are really in flux.

**Tracy Alloway** (1:38)
Absolutely, also one of the rare areas of bipartisan agreement nowadays, it seems.

**Joe Weisenthal** (1:43)
If you're in the AI industry, you have to be kind of concerned that it doesn't seem like they have many friends.

**Tracy Alloway** (1:50)
Everyone hates you.

**Joe Weisenthal** (1:51)
Yeah. I mean, the ratings are negative. But anyway, of course, data center politics gets into so many other things, the anxiety about job laws, energy policy, water policy, et cetera. It's sort of this litmus test, I guess, because no one really knows.
No one knows whether their AI is going to be good or not. Like, will this be a great thing for the world or will this disrupt the world in ways that we can't possibly fathom and, you know.

**Tracy Alloway** (2:22)
But also, if you agree that AI is going to be important in some way in the future, then it seems reasonable to want to design some sort of framework for how data centers should actually get built out. I imagine different states, different cities, different municipalities will have different ideas for exactly how to do that. But it's interesting to see people start to grapple with those requirements. So, you know, do you have to have a closed loop system for water?
Does the company have your own power? Right. Exactly. Like, what are these requirements? What's the optimal data center going to look like in the future?

**Joe Weisenthal** (2:59)
Totally. Well, there are a lot of big questions that this touches on.
Big, like, just sort of in the macrosense, like, what are we building? What is the government's attitude towards building things, period? I'm very excited to say we literally have the perfect guest, Governor Hochul. Thank you so much for coming on Odd Lots.

**Kathy Hochul** (3:17)
Delighted to join both of you. All right.

**Joe Weisenthal** (3:19)
So the big news came out this morning, a one-year moratorium on big new data centers in New York State. Why now?
What was the catalyst for this particular decision today?

**Kathy Hochul** (3:31)
Well, there's been a really what I call flood the zone. There's been a lot of companies that may have been contemplating putting in plans for data centers, massive data centers around the country, but all of a sudden it seemed like there's been a surge, and I have to respond to that.
My main challenge is in the state of New York, I'm making sure we keep the lights on, and making sure that people can afford to keep the lights on. So the challenges that I have to deal with in this environment where everything we want to do for clean energy, renewable energy, or my all-the-above approach are under attack from Washington, so I have to make sure I'm managing our resources. So when you have a huge company that wants to come in, even on the somewhat smaller side, 50 megawatts of power required, that's 50,000 homes that all of a sudden are competing with that consumption of energy. So on that front, it was important to me, but also I've been studying this around the country, a lot of communities are getting, deriving substantial benefits from these companies and they're willing to pay for it. But I realized I used to represent a very rural area of upstate New York and Congress. These communities do not have the sophistication, they don't have the planning staff, the staff that would know to say, we wanted you to give $1 million per megawatt, we want you to make sure that you're investing in the grid, all these other things that could be doing, but they're not being asked. And I think the companies are willing to do that. So I wanna make sure that we take the time to have a community investment framework to give to localities. But also, you have to be able to power yourselves. You wanna come in, I said this in my state of the state, back in January, I launched the Public Service Commission to start this process. They'll be done within this year of the moratorium, so we can have certainty for businesses, but you come, you bring your own power source, or you have to pay a premium to use our grid. And those are the basic foundations of what we're doing with this moratorium.