New York becomes the first state to impose a data center moratorium

https://www.reuters.com/world/new-york-becomes-first-state-impose-data-center-moratorium-2026-07-14/

by granfalloon • 8 days ago

161 215 8 days ago

baby• 8 days ago

I've been very curious about these, because of course these are measures that are anti-tech in a number of ways (or at least unpopular in the tech circle).

I have trouble understanding why Sanders has decided to be vocal about these, especially as he's been on the right side of the societal debate fence since forever. My guess is that he cares more about what AI is going to do for the common people, and he knows that we need to have this debate early (obviously, technology seems to increase disparity in places like the US). But still I'm not sure he's taking a stab at it in the right way.

For New York state (not city, no Mamdani), it seems like it's a much more pragmatic view: it increases people's costs (energy, water, etc.) and there's too much tax exemption(/evasion) for data centers currently.

twosdai• 8 days ago

Ny also for as long as I've been here, does not try to have first mover advantage. The state really does usually show up second or third to the party. So to speak.

dgellow2• 8 days ago

Too often people forget to mention all the first mover disadvantages. It’s often perfectly fine to wait for things to evolve and join when they are better understood and stabilized. Let the others spend money, political capital, and figure out what works, then eventually join the party, without all the baggage the first movers have accumulated.

Same with AI stuff. No you don’t need to be at the forefront of whatever is happening. No you won’t be left behind if that actually completely revolutionize the world, you can let the others try and fail to integrate LLMs in their systems. When it is eventually proven to boost ROI in a reliable way and AI vendors have actually figured out a reliable business model, it’s actually pretty simple to learn the technology and integrate in your existing infra

georgemcbay• 8 days ago

I have trouble understanding why Sanders has decided to be vocal about these

Perhaps the majority of people in Vermont want him to be vocal about it and he is simply doing his actual job.

AI is wildly unpopular outside of our little tech bubble.

Eric_WVGG• 8 days ago

This is a thing about Sanders that gets lost in the discourse. He’s famously soft on guns for a Democrat, for example, because that’s what his voters want from him.

This isn’t to suggest he’s some kind of empty mouthpiece for Vermont — they’re obviously electing him for his beliefs — but he’s also very cognizant of whom he answers to.

MC995• 8 days ago

AI is wildly unpopular outside of our little tech bubble.

That goes against my personal experience. It's only people in this small tech bubble that hate it.

In the broader space people love it. I know plenty of people 50+ who use it as their search engine now, people who use it for relationship advice, my wife works with someone who claims to be dating an AI boyfriend (don't ask me how that works). And that's to say nothing of everyone who uses it to write their mundane emails and spreadsheets.

It only seems to be people heavily involved in tech as part of their day job who have any serious concerns about it.

greenie_beans• 8 days ago

why are we talking about bernie sanders in the context of new york state? he's a US senator from vermont. this is state-level politics, not federal, in the state of new york, not vermont. and he's not mentioned once in this article?

afavour4• 8 days ago

It’s a one year moratorium. I don’t see a problem with this. A lot of voters are concerned about the impacts data centers will have, those concerns are not entirely unwarranted.

We don’t actually have to be moving at breakneck speeds, the AI companies just want you to think we do. A pause to investigate seems warranted.

cmiles84• 8 days ago

Exactly. Towns are also increasingly nervous that when the bottom drops out of the AI bubble they’ll be left with abandoned half-built data centers blighting their communities.

It’s a serious concern that looks increasingly plausible. The bond market for financing buildouts is looking shaky and even Amazon struggled there in its last go at loaning money to fuel the buildout. That doesn’t bode well for others.

chucksta• 8 days ago

Even a completed one has limited use to other industries

thinkingtoilet• 8 days ago

Let's be honest. There is a way to safely build data centers. Sensible laws could be made for them to build enough solar so they can power themselves or they are responsible for the cost of increasing capacity. Things like environmental impact and pollution need to be taken into account. However, since this is America, that won't happen. So companies will build these data centers in red states with little to no regulation and those people will pay for the increase in power capacity, the environmental and public health damages, etc...

pj_mukh5• 8 days ago

Blocking is easy, UN-blocking is hard (see: zoning and housing). There are no objective concerns to be met, and there will never be. I would bet a lot of money the moratorium is indefinitely extended every year.

Always thought letting populism define a "slow-down" was silly, its a moratorium and a permanent veto everyone is looking for. It's fine, the data centers will be built elsewhere in more politically impoverished states, New York and especially NYC will still reap the benefits and offload solving the gnarly energy problems to someone else. Federalism working?

afavour4• 8 days ago

There are no objective concerns to be met

Are you sure? Most of the objections I've seen center around environmental impact and effect on residential energy pricing in the surrounding area. Both of these seem to be to be objectively measurable.

the data centers will be built elsewhere in more politically impoverished states

What does "politically impoverished" mean? I'd say more "politically permissive" states would make more sense here. Red states are not impoverished of politics, they just have different politics.

cucumber37328423• 8 days ago

Exactly.

Wall Street is gonna finance these projects and make their cut wherever the projects ultimately are. NY state is simply ensuring that no concrete batch plant in Oneonta accidentally gets rich along the way too,

recursive• 8 days ago

Un-blocking is still easier than un-building.

7jjjjjjj• 8 days ago

Good. AI is an evil technology. These data centers shouldn't be built anywhere ever.

joering2• 8 days ago

We don’t actually have to be moving at breakneck speeds

According to one Canadian, er sorry, a UE citizen, er sorry, an Irishman named Kevin O'Leary, who is seeing Chinese spys everywhere, we actually do need to move with breakneck speed, because otherwise the quality of American lives will be forever gone. Or at least infuse of naive VC money flowing into his pockets will be gone.

UncleOxidant2• 8 days ago

To some extent you wonder if this "tapping the brakes" might be saving some companies from themselves. It's likely we're in the overinvestment phase of this technological cycle and that's usually followed by the bust phase where a lot of companies with a lot of debt go under. See The Panic of 1873 and the overbuilding of railroads (and huge debt accumulation) that led to that.

rainsford3• 8 days ago

I also feel like there has been very little discussion of a localized benefit of data centers compared to the negative impacts. As someone who uses AI and other services that need data centers, I certainly understand why they need to exist. I have not heard a compelling argument for why they need to exist anywhere near me. I'm generally anti-NIMBY, but usually with the understanding that there is actually benefit to certain things existing in my proverbial backyard. If that argument exists for data centers I've yet to hear it.

cogman104• 8 days ago

Yup. This is my main issue with these datacenters. They have a few major local negatives (higher electrical prices, potentially high pollution, noise) and almost no real benefit due to their location.

I experience no difference when I run my LLM either here in the US or in the EU or even in China.

So why should these be given any special treatment and tax benefits? They don't really create jobs locally (beyond the initial construction) and they won't bring in any sort of tax revenue beyond what you could get from property taxes. That makes them just a general nuisance. They are much like sewage or landfills, they serve a purpose and are needed but boy would I never want one near me (unless the company actually ends up paying for my community).

It certainly doesn't help that AI CEOs just can't help but to larp as Captain Planet supervillans when giving public talks to investors.

Ferret7446• 7 days ago

We don’t actually have to be moving at breakneck speeds

There are a lot of bankrupt companies and fallen nations that believed this. Complacency will hurt you, but only when you realize it too late.

cmiles84• 8 days ago

Small town politics generally fly below the radar but this is a real hot button issue in a growing number of communities. Town meetings are dominated by residents lacking the room for otherwise sleeping zoning hearings that nobody attends. Folks don’t want data centers in their town and they’re increasingly successful in chasing developers out.

Outside the bubble of tech the attitude towards AI and everything associated with it has turned quite negative. It’s hard to see that sitting in silicon valley but venturing out into “the real world” it’s hard to ignore.

jeffbee5• 8 days ago

It's extremely easy to see in Silicon Valley. Go to the planning meetings of Hayward, where recently a handful of activists with a history of opposing everything came to oppose a long-planned data center that did their EIR and interconnect request back in 2023. In 2024, local journalist described the data center as "beautiful" and the mayor called it "an incredible space". But now, activists show up to denounce it as a Satanic outpost, because they got whipped into a frenzy on Facebook.

EA-31672• 8 days ago

Or maybe they’re upset that the plan for AI to justify the trillions of sunk cost had to include massive layoffs and replacement of jobs with machines. That may not bother you, but it hardly takes a “Satanic frenzy” to dislike that prospect.

More realistically imo the sunk cost is just sunk, but who wants to be the town buying into a gold rush that’s already showing signs of being a bit overblown.

orangedog5• 8 days ago

Recent survey showed on HN that 60% of adults in the US dislike it which means that 40% either don't care or like it 40 is a massive number, you're not that far from a coin flip.

I don't think any of us have a good read on how people feel because the vocal people are very vocal. Here on HN you'd guess everybody hates it or loves it and there are a bunch of us like me that just view it as a tool with consequences that are currently not understood.

There is such a massive amount of propaganda out there about everything, do you really trust anybody's read on a tech we've never seen before? I don't. How many people are actually well-informed?

cmiles84• 8 days ago

In US politics at least that’s plenty to shut things down, which is exactly what’s happening.

tayo42• 8 days ago

Your closer to a 2/3 and 1/3 split then a coin flip with 60%.

You handwaved that 40% to a positive. This could easily mean very few people have a positive view of AI.

allthetime2• 8 days ago

I love AI assisted learning and code generation - absolutely despise AI “art” though - image, music, written word, video. If AI was just being used to get shit done efficiently, what a dream that would be, instead we are generating infinite mountains of useless bytes to suck people’s brains out in TikTok feeds and annihilate access to original thoughts in a Google search.

freejazz3• 8 days ago

40 is a massive number

Where does that leave 60, then?

jeffbee5• 8 days ago

Finally, we are free from the tyranny of Glonzo.

lenerdenator• 8 days ago

I'm sure that their citizens who work as traders and investors on Wall Street will see this, acknowledge that there are serious problems with how data centers are being built in other parts of the country, and stop throwing mountains of money at companies that are participating in such schemes.

</sarcasm>

aynyc3• 8 days ago

Don't worry, they'll just build the data centers in NJ and still considered NY 1-20.

Sarcasm aside, I don't really know where they would build data centers in NYS. Electricity rate in northern and western NY is going thru the roof. ADK/Catskill have very sensitive environmental laws. Can't really build in lower hudson as real estate cost would be killer.

hexator• 8 days ago

The Catskills have those environmental protection laws because they are the water source for NYC. It would be very stupid to relax those to build data centers.

aynyc3• 8 days ago

NYC owns those lands for water. ADK has forever wild in NYS constitution. They are not gonna get relax for data center because they discharge water and noise and add significant infrastructure change.

Solar farm on the other hand might go up tho.

cromka• 8 days ago

I don't really know where they would build data centers in NYS

They would build them as close to NYC as possible. Data Centers existed prior to AI boom. HFT, edge hosting, etc.

aynyc3• 8 days ago

That's the insider joke. Look up NY1-NY4 data centers, they are all in NJ across the river. NYC just dump their shit into NJ is the usually move. But those areas are full now, and they don't really have anywhere to go but south jersey.

inigyou8• 8 days ago

The AI ones are a hundred times larger. Formerly you needed a building to house racks where each customer had a few servers, now they want a megacomplex all dedicated to one purpose. Few of these are even getting completed, most are abandoned for cost reasons.

martythemaniak2• 8 days ago

Here's a view that I've not seen AI/DC proponents engage in (for example, Carmack's recent pro DC post)

AI is an exciting and promising new tech, much like the web/internet in 90s and smartphones in late 2000s. Back in those times, the tech industry was far, far smaller, tiny in the 90s and maybe like 1/20th of the current size in the late 2000s. Tech companies were not a big part of people's every day lives, so these technologies could be seen as something exciting happening off to the side that you didn't need to engage it if you didn't want to.

Today, Big Tech is absolutely ginormous and huge parts of people's lives are mediated by one of a half dozen companies that together form an interlocking set of barely accountable duopolies. It is this overbearing unescapable structure that is causing the backlash, because many people understand intuitively that this exciting new tech will be leveraged against them in every way possible by this structure. We cannot treat AI as neat new thing to play with, experiment with, find novel uses for, we have to put our guard up and defend against Big Tech and DC opposition is a very easy and straightforward way. DC opposition is also highly compatible with existing NIMBY networks and mindsets, which are bipartisan and widespread. Thus

All that is to say is that it's not the technology, it's that bad people are in power and are weilding it to make your life worse in myriad ways - layoffs, increased electricity rates, slop, etc.

inigyou8• 8 days ago

This is caused by capital accumulation. An oft repeated comment is "these guys being billionaires doesn't make you poor". But it does - it gives them large-scale unilateral control of society's resources to the detriment of regular people. This is an example.

zdragnar• 8 days ago

web/internet in 90s and smartphones in late 2000s. Back in those times, the tech industry was far, far smaller
huge parts of people's lives are mediated by one of a half dozen companies

The latter point is doing a lot of heavy lifting because the first point is whitewashing history. Back in the 90's, you had exactly one cable TV provider, one phone provider, maybe one or two cell phone providers if you could afford one, and your internet options were limited to either your cable TV provider or your landline phone provider for DSL, or AOL if you were really unfortunate.

You probably had one trash / sanitation provider, one choice of place to send your kids to school (unless you went the religious school route or could afford a private school, assuming one was nearby). You had one option for getting your mail delivered. One choice for policing, for fire protection and other emergency services, etc. Having only a few options has been a pretty big part of a lot of daily life.

The internet felt more wild and free, because there weren't too many places to go, and most people didn't go there. The internet didn't shrink, but people who started going online went all went to the same places, so all the growth went... where people actually wanted to go.

martythemaniak2• 8 days ago

Well, the 90s were a time of liberalization/deregulation so definitely a moving target, but the monopolies/layer of mediation were held back by variety cultural, regulatory and legislative checks. Glass-Steagall was repealed in '99, fairness doctorine was repealed in '87, but the mindset and expectations remained in place, the idea of Citizens United would have been considered absurd, agencies had stronger regulations, etc etc. Today you have a handful of people who control these companies (non voting shares) paying money directly to the president in return for preferential access. Laws and the public interest are not a part of any consideration.

Here's a practical example: your gmail account today is probably more important to you than your phone number was in the 90s and you can run afoul of some random ML subsystem and lose access. There is no recourse or accountability. Randomly loosing your phone number and not having recourse was not a thing back then.

But yes, I was on the internet in the 90s, the little playground we fled to has grown into a terrible panopticon run by unaccountable people for their own personal interest. NIMBY DC opposition is a terrible proxy to tackle this, but it may be the only tool available.

goda90• 8 days ago

I'll say it again. If these data centers are really going to be so profitable, then it should be easy to pay for closed loop cooling, self-built renewable energy and storage, noise and light mitigation, and still pay taxes. Attempts to dodge those is pure greed and people are right to fight back.

khurs2• 8 days ago

The state currently has more than 130 data centers, according to Data Center Map, compared with more than 600 in Virginia and about 500 in Texas.

Texas is physically larger and 'business frienedly' so suspect they will be getting a lot more.

Taylor Sheridan can do a new series where a Ranch owned by a family for many generations is targeted by a Datacentre company.

piltdownman2• 8 days ago

The Governance of that oh-so-dependable Texan power grid are going to engage in some macabre arithmetic this Winter...

ecshafer2• 8 days ago

many of the data centers are being built with natural gas generators on site, and they are using excess gas from the oil drilling.

orangedog5• 8 days ago

That happened in 2021 and we haven't had similar issues since. I haven't experienced a power grid failure since then.

dylan6043• 8 days ago

Taylor Sheridan's movie studio is on land that was once a ranch

khurs2• 8 days ago

Really? How ironic

thisisit• 8 days ago

Taylor Sheridan can do a new series where a Ranch owned by a family for many generations is targeted by a Datacentre company.

More likely he is going to make something like Landman: https://en.wikipedia.org/wiki/Landman_(TV_series)#Renewable_...

story about a salt of the earth datacenter operator who manages the datacenter and people while spreading misinformation about the impact of datacenters on people.

dfansteel• 8 days ago

Taylor Sheridan can do a new series where a Ranch owned by a family for many generations is targeted by a Datacentre company.

It’s all fun and games until the cost of beef and oil skyrockets.

htrp• 8 days ago

This just means that DC builds will move to other states. It isn't exactly like you need low latency/colocation for AI workloads.

kadabra9• 8 days ago

Isn't that the point? Keeping data centers out of neighborhoods that don't want them?

ronnier• 8 days ago

Not really. The people who oppose them don’t want data centers anywhere, at all.

xyst3• 8 days ago

Probably but now planning of these datacenters will now include power redundancy and a shit ton of backup power. Some commenters here think "just move dc to texas." Sounds like a good idea until you realize grid is nearly entirely separate from federal grid. State manages it and completely ignores any attempts to weatherize it.

2021 was an absolute disaster. There was a moment where the grid could have completely collapsed. But by some luck, the state avoided that.

Can they do that next time? Shall wait and see.

wang_li• 8 days ago

These feels like bribe seeking behavior. Pol sees an industry that likely will have a lot of potential market within the pol's jurisdiction, pol publicly puts a speedbump or roadblock in front of the industry causing the industry to start lobbying pol/pol's friends.

archonis• 8 days ago

2026 is an election year for the Governor. One year moratorium conveniently allows the incumbent to have cake and eat it too.

ReptileMan• 8 days ago

A good solution for this is just the AI companies to cut access to this types of areas. After all AI is just bubble that will pop any second. It obviously have no economic values as the tokenmaxxing fiasco showed. I know it is true because NYTimes wrote on the matter.

kyledrake• 8 days ago

A lot of people run production, non-AI servers out of New York data centers. This will be a serious problem for a lot of people, including smaller companies, when they can't expand capacity in New York anymore and prices for what's left start going through the roof. It's not always easy to move servers to other data centers, not everything is an eventually consistent database.

embedding-shape• 8 days ago

Are you one of them? The other side of the issue is "raising power costs, straining water supplies and burdening local communities" according to the article. I guess the crux is figuring out who would suffer the most, data center expanders/builders, or the local community? If the latter, then this move seems right from my point of view, but I'm also not building/managing data centers.

I think it's reasonable to pump the brakes for a year (which is what they've done) and then see where things are in a year, even when there is just a risk to the local community. Worst case scenario, those businesses and data centers end up one year behind schedule, compared to the downsides, that seems acceptable to me.

otterley• 8 days ago

It only applies to DCs > 50MW.

xyst3• 8 days ago

Should read the article before spouting off FUD

One-year construction ban will apply to data centers using 50 megawatts or more, official says

This is targeting "hyperscalers" or AI dcs. Non-AI datacenters consume well below this threshold.

UncleOxidant2• 8 days ago

Oregon has a 1-year moratorium on new data centers qualifying for the state's Enterprise Zone (EZ) property tax incentive programs (as of June 5, 2026. We shouldn't be giving tax incentives to these Data Centers. But it looks like this NY moratorium goes way beyond that to actually stopping construction.

int32_642• 8 days ago

I have a family member that wants to ban all data centers and I felt like Daniel Plainview in the milkshake scene showing them the AWS region selector interface, explaining that regional data center bans in deep leftist areas won't move the needle.

Nothing short of a totalitarian one world government can stop the development of AI technology, there's simply too much demand. It's just not happening.

These people should make peace with it sooner than later and propose more reasonable terms like mandating AI companies invest in renewable energy.

allthetime2• 8 days ago

A lot of us would be happy with them being more heavily taxed on consumption and that money going directly to making everyone’s utility bills much cheaper. Being forced to create more capacity would also be great.

freejazz3• 8 days ago

areas won't move the needle

Wont move the needle? Go ahead and build shit in your community, I'm happy its being kept out of mine. Stop trying to pretend like NY is trying to legislate the nation by maintaining its own front and backyard.

bb867542• 8 days ago

"totalitarian" for a democratically elected representative government to ban something? How? If other counties or states want them fine, godspeed, take them. We'll be just fine without them.

- Lifetime resident of what might as well be called AWS us-east-1, Virginia now.

verdverm3• 8 days ago

"totalitarian" for a democratically elected representative government to ban something?

Steven Miller has figured it out

int32_642• 8 days ago

The regional AI policies can be fully democratic, but banning AI data center construction globally would require coordination that only a totalitarian undemocratic one world government could achieve.

Many economically stagnant areas actually see it as an incredible economic opportunity when Americans want to destroy their lead in AI, because they can capture business investment that would be reliably American.

Crushing AI would require crushing these countries, many of which are already hostile to American foreign policy.

bklosky• 8 days ago

Regardless of your personal feelings about AI, this is pretty clumsy regulation that will just cause Tiebout sorting away from NY. If there are negative externalities, tax 'em, use the proceeds for some feel-good social programming, and let the data center builders internalize the costs...

ASinclair• 8 days ago

Why would people move to jurisdictions that are building AI datacenters? It seems like people would move away from them.

ianm2184• 8 days ago

People move towards places with growing economic opportunities.

New York heavily restricts construction and infrastructure projects of all kinds. The tech and finance elite will stay here but normal people who are trying to make a decent living in construction and similar trades will end up following opportunities.

NYC population is declining after all [1] largely because the city would rather treat housing as a scarce resource for them to divy up than something to increase the supply of.

[1]. https://www.realtor.com/news/trends/new-york-city-population...

mcphage• 8 days ago

What would the advantage be to New Yorkers if they were built here?

EcommerceFlow• 8 days ago

Instead of blaming the energy supply restrictions those states have imposed, the politicians are now blaming datacenters.

TheGRS2• 8 days ago

I consider myself pretty YIMBY, but the data center build outs are definitely starting to catch my eye.

On one hand I want to stay YIMBY here, my typical problem with arguments against this stuff is that it looks at the resources as finite. We can/should build more power capacity. Water usage concerns already have solutions. The market should be allowed to do its thing.

On the other hand I think there are looming problems with data centers. Energy is the obvious one because its detrimentally affecting residents who had no part or say in someone gobbling up a public resource. And its cheaper to build the centers that don't recycle their water usage, so some legislation is needed there. A moratorium toward those ends makes a lot of sense to me.

I have one other unfinished thought that maybe a wait-and-see mentality is a good thing right now. We might be approaching peak LLM usage, maybe. If we are nearing a bubble burst, I can see how a state's leadership might want to protect its residents however it can, but I don't totally know if a moratorium on this achieves that or just delays the inevitable.

dml2135• 8 days ago

On one hand I want to stay YIMBY here

As far as I'm aware, the YIMBY "movement", or whatever you want to call it, is pretty squarely about housing development. It's not about saying yes to building anything and everything, but saying yes to new housing in particular.

For example, https://newyorkyimby.com/ is pretty much exclusively about housing.

TheGRS2• 8 days ago

It definitely also applies to infrastructure like building out clean energy or highways. My connection there was to say, yes build a data center so that we also need to build more energy production. I feel like a lot of people view the current problem from the lens that energy is a finite resource, when its also something that can be expanded.

whartung• 8 days ago

How are (can) datacenters be taxed?

Mind, I don't know, but normally you put in a business, or factory, etc. the state can tax the economic output of the factory.

The factory builds things, sells things, they tax the sales of those things. Local employees get salaries that can be taxed, etc. Of course, property taxes on the land and improvements.

But how does that work with a datacenter?

If I pay $5 for an EC2 instance that happens to be hosted in, say, Virginia, is that a "sale" from the "Virginia Data Center", or is that sale realized somewhere else?

Of course I don't know how that works with, say, a Ford assembly line in Tennessee, with the car sold in California. Does Tennessee get a piece of that Bronco when it leaves the factory, or is it all just internal, corporate money shifting?

As I understand it, the people -> systems ratio is really low. Large datacenter managed by, perhaps, a 1 or 2 dozen people. Most of the "work" is remote, but there needs some hands on to dust the hardware off once a week. But, it's not your typical ratio of people per sq ft of space as other industries.

Just seeing that if you have this datacenter thats "bringing in" lots and lots of dollars, how does the state and local community get their take of that economic activity?

CrimsonRain4• 8 days ago

Why do data centers need to be taxed separately?

Why does the local community need their take from that economic activity? What are they even providing? Are they providing land, electricity, and hardware for free to the data center?

fra• 8 days ago

For two reasons: 1. They create externalities 2. They generate an economic flux that can be taxed

jbm• 8 days ago

If human activity is taxed, AI activity will be taxed. It's just inevitable. It will be taxed at multiple levels until we figure out the right level to do so. Some of it will be detrimental to AI development but that's normal - in Canada we had a hidden manufacturing sales tax until the 80s which made exports more expensive.

A technology that puts X% of people out of work is going to be taxed.

inigyou8• 8 days ago

The xAI one is emitting so much NOx pollution that it gave entire towns asthma for the rest of their lives and nobody is compensating them for it. People in Georgia are being threatened with no electricity next year because it's all going to data centers.

rainsford3• 8 days ago

At the very least they take limited land in a community that could instead be used for any number of different things. If they're not taxed, they provide essentially no benefit, economic or otherwise, to the community in which they're located. Basically any other use of the land would provide more localized benefit by providing more jobs, housing, places for residents to shop or things for them to do, etc, all of which benefit the community more than a data center.

Of course data centers aren't just taking up land. They also in many cases produce massive amounts of noise, water and electricity usage, and are visually pretty unappealing to have in your backyard. And there is essentially no upside. Data centers aren't like shopping malls. You might benefit from them existing, but you don't benefit from them existing right next door. If they're not providing at least some tax benefits to the community, I can think of zero reason any community would want them.

victorbjorklund• 8 days ago

If the factory in Tennessee is its own legal entity and the sales office is in another (it’s a group) then yes transfer pricing is used where the goal is to use the market price of an arm length distance (what would you pay for the factory/data center if it was someone unrelated to you) and if same company (guess more uncommon) you use formulas to allocate where value is created and where taxes should be paid.

twoodfin5• 8 days ago

Property tax is the dominant method for local governments to capture the value of hosted commercial activity.

You don’t need a high rate to capture plenty of value out of a $multi-billion data center.

The problem is mostly on the electricity side, with highly regulated utilities not prepared (on the regulator or regulated sides) to respond to such a large shock to demand. Utilities are typically regulated at the state level.

kotaKat• 8 days ago

They keep negotiating payments-in-lieu-of-taxes to dodge fair tax rates and grab special treatment, so we do see a loss in value there over decade(s) in many cases.

pembrook4• 8 days ago

The factory comparison is a moot point. This isn't about taxation.

Do you think the people hysterically screaming about a data center being built within a 500 mile radius of them would be okay with you building something that uses even more energy/resources like an actual factory?

We don't need unique taxation regimes for datacenters...they've existed as a concept for 70-80 years and are not novel in terms of their energy usage (they use less energy than traditional factories and less water than golf courses). These are all solved problems.

The solution to a fundamental lack of meaning in secular modernity will not come via taxation unfortunately. The doomsday religion that has captured the zeitgeist for the past 40 years is grasping at straws (datacenters) while trying to pivot from climate hysteria to AI hysteria given their end times prophecy did not come true. No amount of tax money will provide the same level of meaning as LARPing as an activist fighting in defense of an abstract fragile god (a femininely delicate "mother earth").

qntmfred• 8 days ago

The solution to a fundamental lack of meaning in secular modernity will not come via taxation

Well we better figure out where it ought to come from then. Maybe AI can help us explore the latent space.

cwmma2• 8 days ago

If you can't tax the outputs you tax the input.

So force then to pay more for electricity or water either through direct taxes or by forcing them to subsidize other users.

beAbU• 8 days ago

You tax the revenue that the entity that owns the datacentre generates, like any other business.

Am I missing something?

QuantumFunnel• 8 days ago

The entities that own the data centers (the mag7) famously do not pay much in taxes due to their extensive use of tax havens and loopholes

cwmma2• 8 days ago

First off business are taxed on profits not revenues, so a money losing business doesn't pay taxes.

Second if there is something that causes undesirable side effects (like a data center) you want to tax that activity specifically so the Corp with 8 data centers pays more then the Corp with 1.

burnt-resistor• 8 days ago

Data centers should probably be mostly regional or local co-ops with community-based dividends like Alaska.

charcircuit• 8 days ago

They shouldn't. It's such a toxic view that because something is successful that it justifies stealing money from them.

evantbyrne• 8 days ago

Some guy floated the idea of putting in a small datacenter in the nearby city and asked for public comment. The next town hall had a huge turnout and multiple people got kicked out for rushing the podium. Meanwhile, people are also protesting and suing to try and stop the nearby solar farm construction. What I'm wondering is why can't we have this level of enthusiasm for actual environmental reform and the transition to clean energy? It almost feels like it is just an anti-progress movement in different clothes.

dylan6043• 8 days ago

The anti-climate change movement has been around well before social media so it is pretty much just ingrained at this point. Anti-datacenter is feeling the influence of social media. So while people are not as motivated by anti-climate change as they are numb to it, the datacenter movement can still gets all of the feels.

mindcandy2• 8 days ago

With datacenters there is a huge amount of ragebait in the news and social media. People are anxious about jobs and reporters and influencers are cashing in on that anxiety by running headlines that imply doom. Datacenters are hugely problematic. But, everywhere I go I see media and commenters exaggerating, implying, assuming, or just making up outrageous claims. But, it's the hot topic right now and outrage drives the clicks that pays the bills. So, ragebait it is.

We solar, it's clear to me that Exon and friends have been funding anti-green-energy politicians and propaganda for decades. They knew full well that greenhouse gases would wreck the world. And, they new they could have transitioned to actually being "Beyond Petroleum". But, the profit margins would not have been as high. So, instead they are spending billions to convince everyone to let them keep wrecking the world for a few more decades.

xyst3• 8 days ago

What I'm wondering is why can't we have this level of enthusiasm for actual environmental reform and the transition to clean energy?

_O&G industry has entered the chat_

O&G industry is the answer to your question. They have the motive to ensure that their energy production method is dominant and have the funds to send lobbyists to convince/pay off lawmakers/politicians to advance their mission.

ianm2184• 8 days ago

I live in NYC and think the politics in the city and state have been a disaster for middle class people and see this as a continuation of that.

The electricity is expensive basically due to the state, so we have to block economically productive projects like data centers because we made our resources artificially scarce. I.e. Indian Point 2 GW Nuclear Site was shut down in 2021, replaced by Natural gas. And then we pay high prices for Natural Gas since we block building of gas pipelines.

NYC is also home to some of the worlds most productive financial and tech companies - it makes tons of sense to have datacenters located close by for latency reasons.

All these laws that block tons of economical construction are made by people who have already "made it" financially and then the class who benefits by having a robust construction, manufacturing, and machining type economy is screwed and we need to turn to destructive measures like rent control.

overfeed8• 8 days ago

I see this as a continuation of that

You may have to explain how middle class would have benefited from the data centers. It's not clear to me at all how the moratorium is "a disaster" for the middle class.

ianm2184• 8 days ago

There is huge amounts of construction costs on these things and electrical work as well. The general rule is 50% or more of construction in NYC goes toward labor, so that drives up wages for local talent.

Obviously any given project is temporary but it seems like there will be a multi year build out so lots of projects.

There is then the secondary effect of skilled labor like machining and manufacturing parts for these centers locally when it makes sense, I.e. turbines or rack assembly.

Data centers pay high property taxes which has been huge in places like Virginia.

And then it’s not just data centers there is kinda a larger war on construction in the North East in general. So NYC blocks tons of common sense urban infill, the state blocks common sense infrastructure projects, and it’s death by a thousand cuts and people just leave the area or leave the trades because it’s not worth it.

Genuinely huge projects like Microns $100B fab in NY get delayed and moved to the center of the country [1], which would’ve been huge for the local economy in terms of spending and opportunities.

[1] https://www.constructiondive.com/news/micron-delay-construct...

sherburt32• 8 days ago

Data centers in space sounds really stupid until you consider how hard it is to get a data center built on Earth.

bilbo0s3• 8 days ago

Even then, it still sounds stupid.

sherburt32• 8 days ago

Yeah…

mindcandy2• 8 days ago

A moratorium seems excessive when the requirements to make a majority of people happy are pretty clear.

The easy ones are:

1. Use energy and water independent of the municipal grid. 2. Don't build so close to homes that they hear the fans.

A lot of people are rightly concerned about water. That was a big problem with older evaporative cooling systems. But, the newer closed-loops systems being built now are much less worrying.

Water usage concerns can be addressed by doing what https://www.boxelderstratos.com/ did. That's an extremely controversial site because it's 40,000 acres. How could it be so huge? Because that's how much land they had to buy to be a net reduction in water table use compared to the previous owners. It's not a warehouse the size of San Francisco!

A lot of people are rightly concerned about their electricity bill. But, what I'm seeing is that new large datacenters are opting to generate energy on-site using huge amounts of natural gas. That's obviously also very bad because of CO2. But, it doesn't affect your electricity bill nearly as much.

Using the Stratos project as the example again, there's a lot of outrage about how it will "Use 9GW! That's more than double Utah grid capacity all by itself!" But, it's not on the grid. It's starting with 1.5GW of natural gas from a pre-existing pipeline. That's still hugely problematic. Just not in the way the ragebait implies. They claim they are going to build up a mix of gas and solar after launch. But, we'll see how that goes...

If there was regulation requiring them to build up with green energy, regulation with teeth, Stratos would not be nearly so controversial. The water is covered, the energy is off the grid, it's far from any residents, the only concern left is the tremendous amounts of CO2 to be produced. To be clear, Utah already has had several non-datacenter sites producing that much CO2 for a long time now. But, it's not great to add another one.

My point is that if New York put in place a list of reasonable requirements for building and actually enforced them, then a supermajority of residents would be OK with datacenter build-outs. Of course, a minority of folks are so enraged that they want to see all datacenters burned down. But, you can't please everyone.

godwinson__4-8• 8 days ago

We should build more data centers. Provided we extract as a political concession UBI so that the LLMs that run in these places, which are trained on a public corpus and will doubtlessly increasingly eliminate the bargaining power of millions of Americans, do not primarily benefit only their already fabulously wealthy owners.

We can build a better society in which this UBI is scaled as LLMs take over more of the economy. Otherwise, we are clearly headed for more shocks to the American political system as increasingly dubious figures create more phantoms (poor day laborers are "taking your job", China is to blame for American companies taking advantage of "free trade") which will keep tipping towards outright fascism ("enemy of the people", ICE executing people in the streets) to blame for our fundamental societal issues that apparently no one is interested in solving - the societal affects of transformative economic shifts - which no, cannot be stopped or postponed or placed in moratorium indefinitely.

We might as well all push for this now with highly consequential elections approaching over the next 2 - 3 years. Because the insanity will only get worse. We've seen this pattern before. The famous fascists of the 20th century weren't born that way and their path was not inevitable. Many of them actually humorously careened from something more like "far left" communism to fascism as they tried to figure out what would stick in trying to appeal to a world wrought with the consequences of war and economic disruption - delayed affects of the industrial revolution. Don't just try to halt the LLM revolution - you cannot, and you will fail - but be clear about what your demands are.

Moratoriums should have some sense of acceptance criteria or demands. They should not be ways for politicians to simply delay the inevitable because they have no good answers. I think these concerns about power consumption are excuses to deal with the real problems. It's not like energy consumption is thought of as intrinsically bad by the people pushing for these bans. I think LLMs could ultimately be better for society than my neighbor's spotless F-150. It's clear the antagonism to these data centers comes from the inequities around how the gains will be distributed. Ultimately state moratoriums are also ineffective because they will just move to another state, so people in New York will lose in the short term (or benefit - depending on what exactly you object to), but either way we all suffer in the longterm. Make UBI a demand of people running for national office that want your vote.

chung8123• 8 days ago

If datacenters are no longer in the US wouldn't another country just take on the demand for them? Seems like the US would want data sovereignty.

1vuio0pswjnm7• 8 days ago

Text-only, no Javascript:

   elinks -dump http://assets.msn.com/content/view/v2/Detail/en-in/AA27UmDH \
   |sed '1,/\"body\"/d;/readTime/,$d' \
   |tr -d '\134'

"July 14 (Reuters) - New York became the first U.S. state on Tuesday to halt construction of large new data centers, imposing a one-year moratorium as concerns grow that the facilities driving the artificial-intelligence boom are raising power costs, straining water supplies and burdening local communities."

More states to come?

xtiansimon• 7 days ago

“…as well as examine the potential environmental impacts of the construction and operation of data centers in the state.”

I’ve been thinking about this lately after the Midtown Manhattan building renovation scare. The overall reporting included a discussion of engineering assumptions saying in effect an office building is designed and constructed with certain weight load assumptions based on the planned use. When performing a conversion those assumptions must be uncovered and evaluated for the new use. While that’s logically reasonable, evidently problematic in practice.

So the question in my mind is this, how do municipalities—especially in rural or suburban areas—come to an understanding of these buildings and their impact on the community? The state must move to slow down less cautious local governments from making bad deals.

https://youtu.be/uTC2pCXNbo4

stasomatic• 7 days ago

Could someone ELI5 why we need this many DCs without diving into environmental costs, blight on the landscape and electricity costs rising?

As in, do we functionally need them or is this a grift? It seems we are doing less with more. Is there anyone suffering or left out in the cold because we don't have enough compute? Why don't the companies that move more and more work to AI workflows build their own?

What if there is a breakthrough tomorrow and we don't need this much Nvidia silicon anymore, what happens?

blinded• 7 days ago

Can they build a nuclear power plant or some housing instead?

johannesrexx• 7 days ago

Thus do the Democrats of America implement the will of the CCP:

https://garryslist.org/posts/the-campaign-to-kill-american-a...

krapp• 7 days ago

Christ the font on that site is terrible.

First rule of agitprop - make it readable.

New York becomes the first state to impose a data center moratorium

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