President Donald Trump sharply criticized New York Gov. Kathy Hochul after she ordered a statewide pause on new hyperscale data centers, arguing the decision could cost New York billions of dollars in investment, thousands of jobs, and weaken America’s leadership in the rapidly growing artificial intelligence industry.
In a post on Truth Social, Trump accused the Democratic governor of driving technology companies out of New York and sending economic opportunities to states with lower taxes and fewer regulations.
“Governor Kathy Hochul, for political reasons, has terminated all Data Centers being built, or to be built, in New York State,” Trump wrote. “These Companies are now being sought in Alabama, Florida, Texas, Arizona, and many other States.”
Trump warned that the decision could have consequences beyond New York, arguing it may slow America’s progress in artificial intelligence while giving foreign competitors, including China, an opportunity to gain ground.
Trump Warns New York Is Losing AI Jobs and Investment
Trump described hyperscale data centers as powerful economic drivers that generate long-term investment, create high-paying jobs, and produce significant tax revenue for state and local governments.
He also argued that these facilities are designed to support their own infrastructure needs, including electricity and water, while fueling innovation across multiple industries.
Trump argued that progressive Democrats should not be allowed to enact policies that, in his view, would drive data centers, artificial intelligence investment, and other advanced technologies out of the United States and into the hands of competitors such as China and other countries.
The president predicted companies looking to expand their artificial intelligence operations would simply move their projects to states that actively welcome technology investment.
Trump said the economic benefits, tax revenue, and job creation associated with data centers would instead flow to states—many of them Republican-led—that actively compete for technology investment with lower taxes and business-friendly policies.
Kathy Hochul Defends Statewide Data Center Moratorium
On Tuesday, Hochul signed an executive order that immediately suspended state approvals for new hyperscale data centers while regulators work on creating updated rules and standards for future developments.
Hyperscale data centers are massive facilities that house thousands of computer servers and provide the computing power needed for cloud services, artificial intelligence, and advanced digital infrastructure. Because they consume large amounts of electricity and water, they have become the focus of growing debates over energy policy and environmental impacts.
The governor defended her decision by arguing that New York must carefully evaluate the long-term effects of additional large-scale facilities before approving new construction.
Hochul said the rapid expansion of data centers could increase utility costs, place added pressure on natural resources, and create uncertainty for New Yorkers, adding that she believes the state has a responsibility to take action before allowing additional projects to move forward.
According to the governor’s office, the executive order directs state agencies to establish new standards covering environmental impacts, electricity demand, water consumption, and other issues before additional hyperscale projects can move forward.
Supporters Say Data Centers Fuel Economic Growth
Business groups and technology advocates have warned that delaying or restricting data center construction could discourage investment at a time when demand for artificial intelligence infrastructure is accelerating worldwide.
Many of the nation’s fastest-growing technology hubs are competing aggressively to attract these facilities because they often bring billions of dollars in private investment, permanent jobs, construction work, and increased local tax revenue.
Republican-led states such as Texas, Florida, Alabama, and Arizona have actively promoted themselves as destinations for major technology projects by offering competitive tax policies, streamlined permitting, and business-friendly regulatory environments.
Supporters also argue that expanding domestic data center capacity is critical if the United States hopes to remain competitive with China in artificial intelligence, cloud computing, and other advanced technologies.
Data Centers Become a Major Political Issue
The debate over data centers has become an increasingly important political issue in New York as Hochul seeks another term in office.
The governor has already faced criticism over rising utility costs and affordability concerns. Earlier this year, she scaled back portions of the state’s greenhouse gas reduction agenda after acknowledging the financial impact higher energy costs were having on consumers.
Her Republican challenger, Nassau County Executive Bruce Blakeman, opposes a statewide moratorium and argues local communities should have the authority to negotiate directly with technology companies when projects promise meaningful economic benefits.
Blakeman has said local governments—not Albany—are best positioned to determine whether proposed data centers will create jobs, strengthen local economies, and generate long-term tax revenue.
Similar Debates Are Emerging Across America
Although New York has not attracted as many hyperscale data centers as some Southern and Western states, similar proposals to limit or delay large-scale projects have surfaced in more than a dozen states as policymakers weigh economic development against energy and environmental concerns.
Earlier this year, Maine Gov. Janet Mills vetoed legislation that would have blocked a proposed data center in a community seeking to replace hundreds of jobs lost after the closure of a paper mill.
The growing debate reflects the enormous demand for artificial intelligence infrastructure as technology companies race to build the computing capacity needed to power the next generation of AI tools and cloud services.
For Trump, the issue is straightforward. He argues states that embrace technology investment will attract billions of dollars, create thousands of jobs, and strengthen America’s position in the global AI race, while states that impose new restrictions risk watching those opportunities move elsewhere.
As competition for artificial intelligence investment intensifies, the battle over data centers is expected to remain a major economic and political issue heading into the 2026 elections.