The United States is engaged in a high-stakes, winner-take-all technological cold war with China. But the U.S. cannot lead in artificial intelligence if its largest economic zones function as anchors, not propellers.
Unfortunately, New York State is pushing for more innovation-killing regulation, spinning up red tape and mandating bureaucracy. Just three months into 2026, legislators in Albany have introduced more than 180 AI-related bills, far exceeding the quantity of legislation in any other state and even doubling that of California. There’s a bad idea for everything: national AI lab development rules, disparate-impact paperwork assessments and audits, algorithmic-pricing regulations, “robot taxes,” and AI rules in journalism and hiring.
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New York’s everything-and-the-kitchen-sink approach to AI regulation will accelerate a continued business exodus. Consumers will suffer under the state’s micro-managerial, paperwork-first policies. And, because many regulations will have negative spillovers, the damage will extend beyond New York.
The harms aren’t hypothetical. Last year, Governor Kathy Hochul signed the Responsible Artificial Intelligence Safety and Education (RAISE) Act, which, after chapter amendments, regulates potential “catastrophic” risks associated with major AI systems. Governor Hochul boasted that the law sets the “national standard” for AI governance.
But lawmakers in Albany should not be dictating policy for the entire nation, especially on decisions of such magnitude. These issues are best addressed by national security experts with the necessary clearances and information to weigh risks and consequences.
To win the AI race, the United States needs to build more data centers. But New York is floating a three-year moratorium on data-center construction. By the time it elapses, the U.S. will have lost the AI race and forfeited its leadership position to Beijing.
Even when some New York lawmakers seek to boost AI capabilities, others erect new roadblocks. For example, the state promoted a $100 billion Micron Technology chip-making complex in Clay, New York. But opponents quickly filed lawsuits to halt construction until environmental and labor demands were satisfied, including two lawsuits filed on the day the project broke ground. Construction has already suffered serious delays, and the project could be derailed altogether.
It’s not just state lawmakers obstructing AI progress. In 2023, New York City enacted a first-in-the-nation law requiring race- and gender-bias audits of algorithmic hiring and firing tools. After a Cornell study found that only 18 of 391 city employers posted the audits as required, the Society for Human Resource Management (SHRM) declared the law a bust. But the measure had already inspired the sweeping Colorado AI Act, a law that that state’s government has regretted ever since.
Then, in 2024, Governor Hochul signed the Legislative Oversight of Automated Decision-making in Government (LOADinG) Act. The bill was sold to the public as a way of ensuring ethical, transparent, and accountable government AI use. In reality, it baked in layers of union protectionism, paperwork, and impact assessments.
The law stipulates, for example, that automated decision-making systems cannot result in a “transfer of future duties and functions ordinarily performed by employees of the state or any agency or public authority.” Such language is not written to help public employees make effective use of AI. It’s designed to protect their jobs at taxpayer expense.
New York State’s approach to innovation is at odds with the views of the state’s congressional representatives, who recognize the dangers of falling behind China on AI. Last year, Senator Chuck Schumer described the announcement of China’s powerful DeepSeek AI model as “AI’s Sputnik moment for America.” It was a “wakeup call that Congress desperately needs” to get serious about the AI race.
“If America falls behind China on AI, we will fall behind everywhere: economically, militarily, scientifically, educationally, everywhere,” Schumer said.
Schumer is right, and his state needs to listen. America cannot afford to let New York sabotage both itself and the nation’s innovators. This is how you lose a technology race.
Photo: Will Waldron/Albany Times Union via Getty Images