New York State has stopped all new data centre construction after Governor Kathy Hochul signed an executive order today. The rule temporarily bars the state from approving permits for large projects.
The order applies to facilities 50 megawatts or larger. It could affect more than a dozen projects currently in the pipeline. The Department of Environmental Conservation will not issue any new permits that have not already been completed.
Concerns about resource use have fuelled some of the backlash, but worry about artificial intelligence has driven much of it as well. A recent Pew Research report found only 10% of Americans were more excited than concerned about AI use in daily life. Just 23% felt the technology would have a positive impact on how people do their jobs. Less than a quarter of the general public feels AI will give the economy a boost, and less than a third were confident the government would regulate the technology responsibly.
“Progress shouldn’t arrive with a higher utility bill, deleted water supply, or noise pollution,” Hochul said at a press conference in Brooklyn. “These data centres can only be built, should only be built in places that want them. So they will never be exempt from local zoning, local approvals.”
The moratorium will be lifted once the state finalises an environmental review process for data centres. Hochul expects this will take about a year. Her office is also considering requiring data centres to pay into a fund that would support the state’s electrical grid. She would like to prevent hyperscale data centres from receiving tax benefits.
Hochul’s executive order arrives as more stringent measures move through New York’s legislature. Last month, the legislature advanced a bill that would pause construction of data centres larger than 20 megawatts for one year. Another bill still in committee would institute a three-year moratorium.
The average data centre built in the last few years has been smaller than 100 megawatts. Those in development are expected to be much larger as AI drives computing demands higher. Through 2030, nearly a quarter of new data centres will exceed 500 megawatts, according to BloombergNEF, driven by increasing AI investment.
The idea of a data centre moratorium has been debated at the state and federal levels, but New York is the first to put one into practice. In December, more than 230 organisations called for a nationwide pause on new data centres. Vermont Sen. Bernie Sanders has also proposed a nationwide moratorium, though it has not received much traction. More recently, Maine’s legislature passed a bill that would have paused construction on new data centres until November 1, 2027, but Gov. Janet Mills vetoed it.
Just years ago, data centres were sought after by states eager to secure new development projects. Recently, public sentiment has soured as new projects have grown in size. The scale and pace at which they are being constructed has started to strain the electrical grid in addition to regional resources like water and farmland. Two-thirds of respondents to a recent poll said they were concerned about data centres driving up electricity prices. Another survey found people would rather have an Amazon warehouse in their backyard than a data centre.
Hochul’s order could be setting up for a clash with the Trump administration, which thus far has supported data centre development. Last month, the Federal Energy Regulatory Commission, which is led by a Trump appointee, told grid operators to develop special fast lanes to speed data centres’ interconnections.
What it means
For the people making things, the immediate effect is a pause on the biggest new infrastructure. Projects requiring 50 megawatts or more cannot get permission to start. This stops the largest AI-driven builds from going forward while the state reviews how they impact power and water supplies. Smaller projects under 50 megawatts are not affected by this specific order.
