3-minute read
Justin Wilcox
| Special to USA TODAY Network
Trump says US will loosen rules in push to win AI race
The Trump administration released a new artificial intelligence blueprint that aims to loosen environmental rules and vastly expand AI exports to allies, in a bid to maintain the American edge over China in the critical technology.
New York leaders want the Empire State at the center of the artificial intelligence revolution — and a recent Brookings Institute report says it is well-positioned to do just that. But while other states build the energy backbone for the AI economy, the state’s climate law is pushing investment elsewhere.
In a recent interview with Bloomberg, Gov. Kathy Hochul rightfully touts New York’s “Empire AI” initiative, which Brookings cites as a model for other states. Yet the irony is clear: state energy policies undercut the very data centers needed to make that vision real. AI doesn’t run on good intentions. It runs on affordable, reliable electricity. Under Albany’s sweeping Climate Leadership and Community Protection Act, fossil-fueled generation is phased out. As a result, prices are up, and reliability margins have thinned.
Put simply, while the governor and NYSERDA have acknowledged that certain mandates under the state’s climate law will not be achieved on time, the Public Service Commission is still legally bound to comply with it. Until these competing visions are reconciled, AI investment will flow to Texas, Virginia and Georgia, where leaders are racing to capture the booming data center market.
This reality becomes clear when looking at where AI firms are choosing to locate. Interconnection requests — proposals to connect these hyperscalers to the energy grid — show New York lagging by orders of magnitude compared with these competitor states. For example, according to a recent Wall Street Journal article, Texas has 186,000 MW in the pipeline and in earnings calls Dominion in Virginia has indicated it has 40,000 MW of pending projects. New York’s large load requests, by contrast, total just 6,055 MW.
The difference in scale is mainly driven by costs. As very large energy consumers, data centers require power that is both abundant and affordable. In New York, rising demand and generator retirements are pushing prices higher. Moreover, PSC-approved double-digit utility rate increases to fund CLCPA mandates undermine affordability objectives. Through August, the average year-to-date cost of energy and ancillary services in New York (i.e., excluding capacity and delivery charges) was $75.72/MWh, nearly double the $42.52/MWh average for the same eight-month period in 2024. A 2024 Department of Energy report underscores the challenge: data centers consumed 4.4% of U.S. electricity in 2023 and could use 6.7–12% by 2028.
Where can NY turn for more power?
With costs rising and reliability uncertain, the question becomes: what power source can reliably meet this demand in the near term?
In practice, the only scalable and cost-effective form of new baseload generation available in the necessary timeframe is natural gas, a fuel for which supplies are abundant. Yet under the CLCPA, all fossil-fueled generation must cease by 2040. This effectively closes off the most practical near-term pathway to providing the reliable baseload power that data centers — and New York’s economy — require. Until advanced nuclear or long-duration storage become commercially viable, New York has no realistic alternative.
Without dependable baseload power, every data center that lands in Virginia or Texas instead of New York represents lost high-paying jobs, millions in local tax revenue, and an ecosystem of suppliers and contractors that won’t take root here.
This matters because the economic stakes are enormous: McKinsey research shows that by 2030, data centers will require $6.7 trillion in capital expenditures to meet growing demand for computing power. Competing states have a clear advantage: energy policies that provide affordable, reliable power at scale. New York, by contrast, is creating barriers that make it nearly impossible for data centers to locate here — despite surging demand and investment.
New York doesn’t need to abandon its climate goals, but it must amend the law to align timelines and targets with the realities of powering the AI economy. With clear, predictable policies, the state could capture thousands of high-paying jobs, generate tax revenue and cement its position as a tech and AI hub. Without urgent changes, the billions transforming Texas and Virginia will bypass New York.
The Empire State can either power the future — or watch it locate elsewhere.
Justin Wilcox is executive director of Upstate United, a nonpartisan business and taxpayer advocacy coalition focused on growing and protecting the economic vitality of upstate New York.