US States Restrict AI Data Centers Despite Pension Gains
State politicians in New York and Pennsylvania are slowing AI data center development despite massive stock gains for public pension funds linked to the industry.
A conflict has emerged between U.S. public pension funds and state politicians over the rapid expansion of the artificial intelligence industry. Between late 2022 and June 2026, 13 of the largest public pension funds recorded $138 billion in paper gains from AI-linked stocks, restoring many funding levels to near pre-2007 recession levels.
Despite these financial windfalls, Josh Shapiro, the Governor of Pennsylvania, and officials in New York have implemented moratoriums or measures to slow the development of data centers. These leaders cite concerns over land use, water consumption, and rising power prices. Shapiro specifically targeted developers he described as acting in unscrupulous ways.
This policy shift creates a contradiction where state governments restrict the industry driving their employees' retirement growth. While New York Comptroller Tom Diapolitan urged tech companies to address resident concerns to protect shareholder value, other officials are pushing for diversification. New York City Council Member Shekar Krishnan questioned the risks of concentrated AI gains, while CalPERS board member Mullissa Willette urged fund managers to account for the social risks of AI.
