President Donald Trump on Tuesday publicly criticized New York State's new restrictions on large data center construction, saying the policy risks sending investment, employment opportunities and tax receipts to other U.S. states.
In a post on social media, Trump framed data centers as a key source of future job creation and economic growth, calling them significant contributors of tax revenue and local investment where they locate. He suggested that New York's move to halt new projects could persuade companies to expand operations instead in places such as Texas, Florida, Alabama and Arizona, which he characterized as offering more favorable conditions.
"New York State has made a terrible decision. All of this Income, and other Benefits, will be going to Red States, and some Blue, where Data Centers are sought as Cash Cows, with Lower Taxes and Record Setting Jobs. They must pay for their own Water and Power, and any leftover goes back to the State and local Community. Data Centers are tremendous WINS for the States and Communities that are lucky enough to get them. New York should change its Policy, IMMEDIATELY,"
On Tuesday, New York enacted a one-year moratorium on construction of large data centers, becoming the first U.S. state to institute such a pause amid concerns about rising power costs, stress on water supplies and local impacts. The temporary ban applies to facilities that would use 50 megawatts or more of power. During the moratorium, the state's Department of Environmental Conservation will not issue discretionary permits that have not already been deemed complete, according to the governor's office.
Governor Kathy Hochul said the measure is intended to address threats to residents from higher utility bills, the depletion of natural resources and uncertainty tied to large-scale projects. She also said the state will pursue legislation to repeal existing sales tax exemptions for large data centers.
Trump countered that data centers typically generate jobs and local economic benefits while funding their own power and water infrastructure, and he urged New York to reverse its policy to avoid losing opportunities related to artificial intelligence and other emerging technologies.
The dispute unfolds as states compete to attract sizable data center investment amid surging demand for AI computing infrastructure. Site selection decisions by companies increasingly hinge on electricity availability, permitting timelines, tax incentives and regulatory stances.
Contextual note: The article reports statements and policy actions as provided by the involved parties. It does not add additional facts beyond those presented.