Category: Tech News Feed

NEW YORK (AP) — No large data centers can be built in New York for up to a year as the state creates rules to protect the environment and its energy grid from the power-hungry facilities fueling artificial intelligence.

Gov. Kathy Hochul signed an executive order Tuesday imposing the country’s first statewide moratorium on hyperscale data centers, which house thousands of computer servers and require massive amounts of energy and a steady supply of water to keep cool.

The move pushes the state into a raging debate over how to regulate the AI industry, as concerns over rising electric bills and environmental risks collide with a desire to stimulate local economies and foster the U.S. tech sector.

“The bottom line is that progress shouldn’t arrive with a higher utility bill, deleted water supply or noise pollution, so we have no choice but to address these challenges created by these massive facilities,” Hochul said at a celebratory signing ceremony in Brooklyn.

President Donald Trump has warned states not to slap regulations on the AI industry, echoing tech companies in arguing such moves hamper job growth and cede ground to China in a race to lead in the rapidly growing field.

Earlier this year, Maine seemed poised to establish a similar moratorium. But the measure was vetoed by Democratic Gov. Janet Mills because it would have blocked a proposed data center in a town that has struggled after a mill closed.

Moratoriums have been proposed in at least a dozen states but have not gotten far, though some counties and municipalities have imposed their own temporary bans.

New York’s executive order pauses state permitting for new large data centers and directs state regulators to create standards that address environmental impacts, energy demand, water usage and other factors, the governor’s office said.

Dan Diorio of the Data Center Coalition, a trade association, said the moratorium “will ensure that those investments, jobs, and economic activity flow elsewhere rather than to New York — with impacts far beyond the data center industry.”

The decision in New York also carries political significance for Hochul’s reelection campaign and the state’s tight congressional races this fall, as Democrats move to address affordability concerns over high utility bills. In addition, the governor this year softened New York’s ambitious goals to reduce greenhouse gases, citing rising energy costs for consumers.

Hochul’s Republican opponent in the governor’s race, Nassau County Executive Bruce Blakeman, opposes a statewide moratorium and says local governments should be allowed to strike deals with tech companies for data center projects that promise enough economic benefits.

In a statement Tuesday, Blakeman said the governor “doesn’t work with local governments and business leaders to figure out how to get things done,” while pledging to “modernize our economy to bring costs down and create good jobs.”

The state Legislature this year approved its own moratorium bill, but Hochul’s office described the legislation as complex and said it needed additional work. Instead, the governor opted for an executive order that would take effect immediately.

State Sen. Kristen Gonzalez, a Democrat who sponsored the legislation, joined the governor during the signing ceremony. “If Big Tech is coming onto our turf, it should be on our terms,” she said.

New York, at this stage, has not been a destination for the largest hyperscale data centers.

BOSTON (AP) — A Massachusetts man was found guilty Monday of conspiring to unlawfully export electronic components to Iran in violation of U.S. sanctions.

Mahdi Mohammad Sadeghi, who worked at the global electronics company Analog Devices, was accused of helping an Iranian business associate get around American export control laws. U.S. prosecutors say the business associate’s Tehran-based company makes navigation systems for the military drone program of Iran’s Revolutionary Guard. Authorities say the scheme included the creation of a front company in Switzerland.

The second defendant, Mohammad Abedininajafabadi, called Abedini in court documents, was not on trial. He is believed to be in Iran after an apparent prisoner exchange for an Italian journalist.

Sadeghi was found guilty on three of the five charges. He showed no visible reaction to the verdict, which came early in the fourth day of jury deliberations. He and his lawyers did not comment as they left court, and he will remain free until sentencing Oct. 13.

Sadeghi, a 43-year-old naturalized U.S. citizen, chose not to testify. A father of two, he lost his job at Analog Devices due to the charges. Although he was arrested in December 2024, long before the current war with Iran, his trial has unfolded during the conflict.

“At its core, this case is straightforward. You cannot send goods, especially the goods at issue in this case, to Iran. Period. Full stop,” Assistant U.S. Attorney Alathea Porter told the jury. “The defendant knew that, and conspired with Mr. Abedini to do that.”

Assistant U.S. Attorney Jared Dolan, in his closing remarks, said documents, text messages and photos proved that the illegal acts were the “fruits of this relationship” between Sadeghi and Abedini.

“The evidence established that he knew what Abedini was doing because he told him in writing,” Dolan said. “He helped him anyway.”

Sadeghi’s attorney, William Fick, told jurors that the scheme laid out by the prosecution “makes no sense” and was full of holes. He said Sadeghi was only offering advice to a longtime friend about how to get business with the semiconductor company, and wasn’t responsible for procuring the parts for Abedini.

Fick said there was no proof the parts ended up in Iran, and he disputed that the Swiss company was a front.

“If you look at the world through dirty glasses, everything looks dirty,” Fick said. “That is fundamentally what the prosecution is asking you to do here.”

Fick also said prosecutors hadn’t shown Sadeghi gained anything from the alleged plan — although the prosecution pointed out that they didn’t need to prove a motive.

“He had nothing to gain and everything to lose,” Fick said. “He has lived in the country for decades. He was a well-regarded, respected employee on his way up in the company.”

Prosecutors had hoped to introduce evidence during the trial related to an Iranian drone used in a 2024 attack that killed three U.S. troops at a remote base in Jordan.

However, before the trial, defense attorneys sought to exclude any evidence related to Abedini’s role in drone manufacturing or attacks on American troops.

The judge agreed, ruling that prosecutors could only give general evidence about Abedini’s Iranian company and how its technology had potential military applications, including for drones. During a hearing in February, prosecutors acknowledged they didn’t have evidence that Sadeghi “knew anything” about the technology he was accused of exporting was allegedly used on the drone involved in the Jordan attack.

Both defendants have been charged with export control violations. Abedini is separately charged with conspiring to provide material support to a foreign terrorist organization that resulted in the deaths of three service members.

Abedini was arrested at an airport in Italy on a U.S. warrant in December 2024, but was released a month later and returned to Iran. Three days after his arrest, Italian journalist Cecilia Sala was detained while reporting in Iran. Sala, who was believed held as a bargaining chip for Abedini’s release, returned home in January 2025.

WASHINGTON (AP) — American consumers — and the Federal Reserve — are being hit with another high-cost headache.

The gusher of investment in data centers — likely topping $700 billion this year — to power artificial intelligence has made memory chips, computer processors and other equipment, as well as electricity, more expensive. Economists expect it will continue to push up inflation at least through the end of this year.

While it won’t be as large a spike as occurred in 2021-2023, when inflation peaked at 9.1%, massive AI spending is likely to keep prices rising more quickly than the Federal Reserve would like. Such increases could lead the central bank to lift its key interest rate later this year to cool spending and bring down inflation. Higher rates from the Fed often boost borrowing costs for auto loans, mortgages, and business loans.

Fed officials will closely watch June’s inflation report, to be released Tuesday, for further signs of AI’s impact on prices. Inflation last month likely cooled as gasoline prices have fallen after a ceasefire was reached between the U.S. and Iran, though whether that trend continues is now unclear as the U.S. and Iran have resumed fighting.

AI spending is lifting prices for consumer electronics

Just four large tech companies — Google parent Alphabet, Amazon, Meta Platforms, and Microsoft — are expected to invest $720 billion this year, mostly on data centers.

Those data centers use a lot of semiconductors, and chip supplies have run low. As a result, economists at JPMorgan Chase estimate that the cost of some computer memory chips will have soared by as much as 400% between 2024 and the end of this year.

Americans are already seeing higher prices for a range of consumer electronics, including laptops, smartphones, video game consoles, and computers. Electricity prices are also jumping as data centers absorb a growing share of new electrical capacity.

In a high-profile announcement last month, Apple announced it was boosting prices for laptops and iPads by about 15% to 25%. A topline MacBook will now cost $1,999, up from $1,699.

Many analysts expect price hikes will come for iPhones next.

“The rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage,” Apple said in a statement. “We have never seen a component price increase this much, this quickly.”

On the same day, Microsoft announced that the price of its Xbox video game console will increase $100 by Aug. 1, citing higher prices for memory chips. Sony is also charging more for the PlayStation, while Dell Computer and HP have raised prices for their laptops.

A “wave of AI-related cost pressures spilling over into consumer prices is still in the early stages of building,” analysts at investment bank Evercore ISI recently wrote.

It’s the latest in a series of waves that have boosted inflation

The impact on broader measures of inflation may be relatively modest, with many economists forecasting that AI investment will boost core consumer prices, which exclude food and energy, by roughly a half-percentage point by the end of this year.

Still, that could be enough to offset declining prices elsewhere, as the impact of President Donald Trump’s tariffs continues to fade and as rental costs cool. Core inflation, according to the Fed’s preferred measure, was 3.4% in May and some economists now expect it may decline only slightly by the end of the year, remaining well above the Fed’s 2% target.

The boost from AI may prove temporary, but it follows previous waves of higher prices stemming from tariffs and the gas price spike resulting from the Iran war. The Fed typically “looks through,” or ignores, temporary price increases, rather than boosting rates to fight them, but an ongoing series of temporary price shocks could threaten to create more sustained inflation, which has already been above the Fed’s target for more than five years.

“In isolation one or two such shocks is perhaps transitory, something they’re willing to live with,” said Abiel Reinhart, an economist at J.P. Morgan. “A sustained series of shocks, or a wider range of shocks, becomes more concerning to them.”

Federal Reserve officials have increasingly focused on AI

Fed policymakers are increasingly focused on AI’s inflationary impact. Kevin Warsh, who took over as chair May 22, has said he believes that over time AI will make the U.S. economy more efficient, which should reduce inflation even as growth accelerates.

He acknowledged in remarks July 1, however, that AI investment is now boosting demand, but declined to speculate on how inflationary the impact would be.

Yet many Fed officials worry that demand for AI-related gear will continue to outstrip available supply, a recipe for persistent price increases.

“If this creates a sustained impulse to demand relative to supply in inflation, I do think that’s the kind of situation where you don’t look through this,” John Williams, president of the Federal Reserve Bank of New York, said Thursday. Williams is also vice chair of the Fed’s rate-setting committee. Williams has supported keeping rates unchanged, but his comment suggests that under some scenarios he could support a hike.

According to the minutes of the Fed’s June 16-17 policy meeting, released Wednesday, many other officials share Williams’ concerns.

Another channel through which AI could raise inflation is through its huge demand for electricity, which has caused many utilities to raise prices. Power companies throughout the U.S. are adding more capacity, an expensive step that can also boost electricity costs.

According to the government’s consumer price index, electricity prices rose 5.9% in May compared with a year earlier, a bigger increase than overall inflation, which was 4.2%. After a pandemic spike, electricity price gains had dropped back to about 2% annually in early 2025.

While prices for computer chips could peak this year and then decline, experts expect electricity demand from AI will push up utility costs into 2028 or even beyond. In February, economists at Goldman Sachs forecast that electricity prices will rise 6% this year and next, and an above-average 3% in 2028.

“We do know what effect AI is having on inflation now, and it is inflationary, not deflationary,” Dario Perkins, an economist at TSLombard, wrote this week.

BRUSSELS (AP) — A top European Union official on Monday called for limits to be placed on children using social media as a special EU panel looking into the challenge recommended forbidding access for those under 13 until tech companies can prove their platforms are safe.

Growing awareness of the dangers social media poses for young, developing brains has shown up in a wave of new restrictions globally. Australia, the U.K., Turkey, Indonesia and others have passed bans on kids under 16 or 15 from using platforms like TikTok, YouTube and Instagram.

Laying out a list of her concerns about the use of social media by kids, European Commission President Ursula von der Leyen — a doctor by training — said that children under 3 should have no exposure to screens at all.

“I believe we need to consider phased and gradual access for different age ranges because childhood won’t wait and once it’s gone, we can never give it back,” von der Leyen told reporters.

“Just as we don’t give our children keys to the car before they have their license, or we do not let them buy alcohol until they are legally allowed. We need to set the age at which they can, the children can, legally access social media,” she said.

Von der Leyen noted infinite scrolling as one of the “addictive” traits that tech companies must address.

The commission has also been targeting tech companies through other means, and last week used its sweeping Digital Safety Act to warn Meta that it needs to disable addictive design features such as infinite scrolling or risk a hefty fine.

Von der Leyen said there should “phased and gradual access for different age ranges” to social media. Children under 13 should only have “time-limited” access under the supervision of parents, teachers or other caregivers, she told reporters.

Teenagers should be given gradual access to platforms that can prove they are “age appropriate” and safe for them, she said.

While she didn’t go into further detail, she and the European Commission — the EU’s powerful executive branch — are likely to come up with a proposal for the 27 member countries to weigh in the near future. Von der Leyen’s policy proposals carry great influence with EU member countries.

A special panel set up to study child safety online delivered its report to the EU chief on Monday. The report said that when it comes to safety, “the burden of proof needs to be on providers, not regulators, parents and children.”

“Until they demonstrate that their services are safe by design, social media and other digital services providers should have restricted access to children under the age of 13 in the EU,” said the report, which is likely to influence von der Leyen’s thinking.

It recommended that “further precautionary age restrictions” should be considered by EU countries for children over 13.

Many social media platforms including Instagram and TikTok already prohibit anyone under the age of 13 from signing up for an account. But those restrictions have been criticized for being too easy to get around and the EU’s digital regulators accused Instagram’s parent Meta Platforms earlier this year of failing to keep underage users of the site.

The European Commission is working on its own age verification app that will let users prove their age while keeping their identity anonymous.

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Chan reported from Toronto.

Meta has pulled the plug on a feature of a recently launched AI tool following criticism that it made Instagram accounts fodder for use in creating AI-generated images.

The move on Friday came less than a week after the parent of Instagram and Facebook rolled out Muse Image, its first image-generation model available through the company’s artificial intelligence assistant, Meta AI.

“Our intent was to provide a useful creative tool and to give people control over whether their public content could be referenced in this way,” Meta said in a statement. “We’ve heard the feedback that this feature missed the mark, so it’s no longer available.”

Like other AI apps with image-generating capabilities, Muse Image creates images based on users’ suggestions. But its also automatically made photos posted on all public Instagram accounts usable by the AI tool as a reference when creating new images.

That led to a flurry of social media posts flagging privacy concerns and instructing Instagram users how to opt out of having their accounts accessed by Muse Image.

Hollywood also was quick to raise concerns about the image-generation feature.

The Screen Actors Guild-American Federation of Television and Radio Artists urged its members to change the settings on their Instagram account to protect their likeness.

In a statement on X, SAG-AFTRA applauded Meta’s decision to shut off the feature.

“With the dangers of nonconsensual digital replicas well known to all, a feature that encouraged that behavior is unwise,” the union said. “We appreciate its discontinuance. It is the right thing to do.”