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New York has officially become the first U.S. state to halt the construction of large data centers, validating recent warnings from BlackRock Inc. CEO Larry Fink about America's strained power infrastructure and putting major utility stocks like Constellation Energy Corp., Vistra Corp., and NextEra Energy Inc. squarely in the spotlight.
According to a Reuters report, New York Governor Kathy Hochul on Tuesday issued an executive order imposing a one-year moratorium on environmental permits for new data centers consuming 50 megawatts or more.
The decision marks a major escalation in the clash between the artificial intelligence boom and local resources. "As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it's my responsibility to take action and lead," Hochul stated.
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The ban perfectly mirrors the exact scenario BlackRock's Fink warned about, around the same time. Noting that the United States is failing to invest fast enough in its power grids, Fink cautioned, "I actually get frightened when I see states saying we're going to do a moratorium. That's not the answer. The answer is how do we deliver more power quickly?"
The moratorium underscores an energy bottleneck that threatens the AI expansion. With tech hyperscalers racing to build infrastructure, Fink noted that data centers currently cost "$50, $60 billion for a one gigawatt" facility.
However, without adequate power generation, these massive capital investments face critical roadblocks. This dynamic places immense focus on utility and clean-energy giants such as Constellation Energy, Vistra, and NextEra Energy.
As states like New York restrict development due to grid strain and rising electricity prices, these energy producers are positioned as essential partners for tech companies. States with the capacity to deliver consistent power without hiking consumer prices will ultimately become "the big winners for growth," according to Fink.
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The U.S. power grid restrictions are raising concerns about America's ability to maintain its technological edge. While New York hits the brakes to protect local ratepayers and the environment, global competitors are accelerating their energy grid capabilities.
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