New York becomes first state to halt data center construction as AI infrastructure faces backlash

New York Is First State to Press Pause on AI Data Center Construction

Expertise Video gaming, computer hardware, laptops, home energy, home internet New York Gov. Kathy Hochul signed an executive order on Tuesday to pause the issuance of new building permits for hyperscale data centers in the state, the first state-level freeze on new construction of AI data centers. The moratorium could last up to one year with the expectation that the state will use that time to "build a regulatory framework that protects ratepayers, the environment, the energy grid and communities across the state." "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," Gov. Hochul said in a press release. "New York will lead the way in creating the strongest standards in the nation for data center development." Other states may soon follow suit. Lawmakers in 15 states have proposed temporary or permanent halts to data center construction, although several have failed to gain legislative support. In Maine, the legislature passed a moratorium, but was vetoed by Gov. Janet Mills. The executive order specifically targets hyperscale data centers, which are used for AI training or inference. While traditional data centers might house hundreds of servers, hyperscale data centers can host tens of thousands of servers and are responsible for disproportionate use of local water and electricity resources. Hochul is directing the New York Department of Public Service to "consider creating a New York Grid Acceleration Fund to require data centers to invest in the state's aging grid infrastructure and energy needs" and is pursuing additional legislation to repeal sales tax exemptions for hyperscale data centers in the state. A representative of Gov. Hochul's press office didn't immediately respond to a request for comment. Existing data centers are unaffected Hochul's one-year moratorium applies to new hyperscale data centers, but construction will continue on AI data centers that were previously issued valid permits. There are also exceptions carved out for certain research and educational facilities that use less power, according to Politico. There are currently 133 data centers operating in New York, with New York City and Buffalo serving as particularly large hotspots for facility construction. To put that number into perspective, other states like Virginia and Texas have built hundreds more data centers than New York and account for nearly a quarter of the AI data center infrastructure in the US. Americans broadly reject data center construction There are already serious concerns about the proliferation of hyperscale data centers across the country. Reports about Virginia's data centers claim tens of thousands of on-site fossil-fuel generators could be responsible for tens of millions of dollars in annual health damages. Foreboding images of deep black smog emanating from these data centers recently made headlines during a heat wave that strained the state's power grid. These highly publicized scares are just one reason people are protesting the construction of data centers near their homes. A Siena Research Institute poll (PDF) found that most New York state residents supported Hochul's one-year moratorium. "Technology should make our lives better, not pollute our water, strain our energy grid, or drive up our utility bills," New York State Sen. Kristen Gonzalez said in the New York press release. "I have heard from New Yorkers across our state who are concerned about what the rise in large data centers might mean for their communities." The New York numbers reflect a broader nationwide reality: Regardless of political affiliation, most people don't want data centers in their backyard. A recent Gallup poll found that roughly 71% of Americans oppose the construction of data centers in their area. More US residents said they opposed new data centers in their area than opposed new nuclear power plants nearby. And while many states' governments have been reluctant to craft legislation banning AI data center construction -- or have outright vetoed proposed moratoriums -- local communities across the country have mobilized to drive out the server farms. While the New York executive order is an important win for data center opponents, the odds are still stacked against them. President Donald Trump has thrown his weight behind the AI industry with the intention of removing so-called "cumbersome legislation" to the advancement of the biggest AI companies. In December, Trump issued an executive order attempting to limit state-by-state regulations and provide a single federal framework for AI companies. The president threatened to withhold broadband funding from states that insist on stricter regulations. While several deadlines under this executive order have already passed without action by the Trump administration, the threat of federal opposition still looms over state governments considering moratoriums like the one in New York.

New York becomes first state to halt datacenter buildouts

New York Governor Kathy Hochul on Tuesday paused incomplete state environmental permit applications for large datacenters while officials work out new rules, a process expected to take up to a year. The order makes New York the first state to enact such a moratorium amid growing concerns over AI datacenters' impact on utility rates and public health. "New York has always been at the forefront of innovation and change but we've also always guaranteed that New Yorkers benefit. 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 said in a canned statement. The order specifically targets large hyperscale datacenters capable of consuming at least 50 MW, subject to exemptions for manufacturing, research, education, and medical facilities. Prior to the AI boom, 50 megawatts would have been considered a large cloud campus. While datacenter campuses now often demand gigawatts of power, the moratorium doesn't preclude all AI bit barns. Fifty megawatts is still enough power for roughly 20,000-30,000 modern GPUs. The moratorium won't last and is instead aimed at providing state officials time to develop and enact rules designed to ensure large-scale buildouts don't hurt New Yorkers. The portable generator units used while bit barn builders wait for grid connections and improvements have come under fire due to their impact on air quality. Elon Musk's Colossus 2 DC is now facing legal challenges over alleged Clean Air Act violations tied to the use of these generators. Over the next year, the executive order directs New York's Department of Public Service (DPS) to develop a generic environmental impact statement (GEIS). Officials will use this to evaluate proposed datacenter projects' environmental, public health, and grid impacts. The order directs Empire State Development to develop a framework to help local communities negotiate benefits like infrastructure improvements or financial support for community programs in exchange for letting bit barns in their backyards. Finally, DPS will consider establishing a fund that datacenter operators may be required to pay into, including a possible insurance pool to protect ratepayers from stranded grid costs tied to projects that are delayed, scaled back, or never materialize. The effect of datacenters on utility bills has become a national issue as several US states launched an inquiry into why, despite claims to the contrary, ratepayers are still paying more. US President Donald Trump isn't keen on AI infrastructure making life more expensive for voters either -- at least not any more than his infatuation with tariffs and the US war with Iran already have. In January, the president demanded Big Tech take responsibility for the power their datacenters consume. Alongside the moratorium, Hochul has promised legislation to end sales tax exemptions for datacenter. New York isn't the first to pursue a moratorium on new datacenters. Earlier this year, Maine became the first to pass a statewide moratorium on new bit barns, only for the measure to be vetoed by Governor Janet Mills. Going forward, New York's moratorium may now serve as a blueprint for other states to push back against the spread of datacenters. Having said that, capping datacenter campuses at 50 megawatts may not stop developers from pursuing multiple smaller sites across the state. While massive datacenters are needed to train frontier models, once they have been trained, those models can be served by much smaller facilities. There is also the potential for multiple smaller, but physically disparate datacenters to be stitched together using high speed, low latency interconnects like Nvidia's Spectrum-XGS switches. These devices are designed exactly for this purpose. ®

New York becomes the first state to impose a data center moratorium

July 14 (Reuters) - New York became the first U.S. state on Tuesday to halt construction of large new data centers, imposing a one-year moratorium as concerns grow that the facilities driving the artificial-intelligence boom are raising power costs, straining water supplies and burdening local communities. The moratorium positions New York at the forefront of a growing national debate over how to manage the infrastructure needed to support artificial intelligence. While technology companies are racing to build new data centers, lawmakers and regulators in dozens of states are weighing measures to limit their effect on electricity grids, utility bills and local communities. "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," said Hochul, who said she will also pursue legislation to repeal sales tax exemptions for large data centers. The construction ban will apply to data centers that use 50 megawatts or more of power, officials in the governor's office said. During the moratorium, the state's Department of Environmental Conservation will not issue any discretionary permits not already deemed complete, the governor's office said. Instead, Hochul directed state officials to develop a Generic Environmental Impact Statement (GEIS) to ensure that new data centers coming online are being held to "consistent standards," as well as examine the potential environmental impacts of the construction and operation of data centers in the state. The ban will be lifted once the state finalizes those ⁠standards, according to Hochul's office. DATA CENTERS SPARK BACKLASH New York's legislature last month passed a bill meant to impose guardrails on data centers, but it has not yet been sent to Hochul's desk for signing. Officials in her office described the bill as complicated, adding that "it's going to take some time to work through" with the state legislature. The expansion of data centers in the U.S. is driving up power demand -- and electricity bills -- in large ⁠swaths of the country, drawing local and political backlash. Only one-in-three Americans approve of the fast pace of data-center construction and most would oppose building one in their own community, according to a recent Reuters/Ipsos poll. Dozens of state legislatures have introduced bills to rein in the effects of data centers on ⁠power bills and the environment. New York is the first to enact a full moratorium. In April, Maine Governor Janet Mills vetoed a bill that would have imposed a similar freeze on those facilities. As of May, there were more than 12 gigawatts of very large energy-using loads, ⁠including data centers, in line to connect to the state's grid, according to a recent report by the New York independent grid operator. The state has the eighth-most expensive retail price for residential electricity in the country, according to U.S. Energy Department data. Reporting by Jasper Ward in Washington; Additional reporting by Laila Kearney, Courtney Rozen, and Valerie Volocvici; editing by David Gaffen Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Environment * Regulatory Oversight * Governance * Public Policy Jasper Ward Thomson Reuters Jasper Ward is a breaking news reporter in Washington. She primarily covers national affairs and U.S. politics. Jasper was previously based in The Bahamas where she covered the collapse of FTX and the subsequent arrest of its founder Sam Bankman-Fried. She was a part of the Reuters team that won the Gerald Loeb Award for breaking news for its FTX coverage.

New York becomes first US state to suspend data centre development

New York is set to become the first US state to impose a one-year ban on construction of new data centres, as backlash swells over the infrastructure needed to power the AI boom. The Empire State will ban data centres of more than 50 megawatts for a period of one year, stopping new permit applications and pausing outstanding ones. A typical large data centre is at least 100MW. In a video posted to X, Governor Kathy Hochul said that the "scale and speed of development has put unprecedented demand on energy and water resources and threatens to drive up utility costs. Before it goes any further I need safeguards in place to protect New Yorkers." Hochul, who is up for re-election as governor in November after serving her first full term, will sign an executive order on the moratorium on Tuesday. The order is a compromise to a more strict bill passed by New York's state legislature that would have halted development of facilities over 20MW. There are currently 12 gigawatts of data centre applications pending in the New York grid operator's queue, according to the New York Independent System Operator. The amount is roughly equivalent to Portugal's record peak electricity demand. New York is home to 133 data centres, according to Data Center Map, compared with 637 in Virginia and 504 in Texas. Existing centres would not be affected by the order. The first-of-its-kind moratorium comes amid a growing backlash over data centres and their potential impact on electricity costs, water supplies and the local communities near which they are built. Politicians and regulators across the country are grappling with how to manage the industry's booming growth. According to data from BloombergNEF, US data centre power demand will surge from 34.7 gigawatts in 2024 to 106GW by 2035. Fourteen states aside from New York are considering banning data centres, including Georgia, Michigan and Pennsylvania. Legislation that would have imposed a moratorium on Maine was vetoed by outgoing governor Janet Mills. Virginia, home to the largest concentration of data centres in the world, recently implemented a new tax on the facilities' energy use. Numerous local bans by cities and counties have been implemented throughout the US. On Monday the White House said it would add utility companies and data centre developers to its Ratepayer Protection Pledge, which already includes tech giants such as Amazon, Google, Meta, Microsoft, OpenAI, Oracle and xAI, in which they committed to cover the cost of power infrastructure needed for data centres. "I never want Americans to pay higher Electricity bills because of Data Centers," Donald Trump said in January. A poll conducted by strategy consultancy Public First found Americans were far more likely to oppose the construction of data centres than other nations, with just 26 per cent supporting their development. In the first quarter of 2026, at least 75 projects worth $130bn were disrupted by local opposition. Blackstone's QTS was recently forced to scrap a vast data centre project in Virginia's Prince William County. During New York's year-long ban, state officials will develop measures to protect utility customers and assess how projects affect the environment.

New York to impose the country's first statewide moratorium on data centers

NEW YORK (AP) -- New York will block the construction of any new large data centers for up to a year so the state can create rules to protect the environment and energy grid from the power-hungry facilities that fuel artificial intelligence technology. Gov. Kathy Hochul is set to sign an executive order Tuesday morning 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. "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, a Democrat, said in a statement. The order will pause state permitting for new large data centers and direct state regulators to create standards that address environmental impacts, energy demand, water usage and other factors, the governor's office said. Tech companies and other backers have argued moves to block the construction of data centers hurt job growth for local communities and cede ground to China in a race to lead in the rapidly growing AI industry. Earlier this year, Maine seemed poised to establish a similar moratorium. But the measure was vetoed by the state's Democratic Gov. Janet Mills because it would have blocked a proposed data center in a town that has struggled following the closure of a local mill. 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. 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 and other pocketbook issues. 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. 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 is opting for an executive order that would take effect immediately once signed. New York, at this stage, has not been a destination for the biggest hyperscale data centers.

New York becomes first U.S. state to impose AI data center ban

New York State Governor Kathy Hochul on Tuesday signed an executive order barring the construction of new large-scale data centers using 50 megawatts or more of power for up to one year, making the Empire State the first state in the nation to impose such a ban. "We're in the midst of one of the most significant economic upheavals in generations ... perhaps ever," the governor said, announcing the executive order in New York City. "These hyperscale AI data centers consume enormous amounts of power, truly threatening to outpace our grid's capacity," she added. "They drive up costs for local ratepayers, and I refuse to let those costs get passed down to New Yorkers." Hochul's sentiment echoes that of many state residents and environmental leaders, who have heavily scrutinized hyperscaler data centers on the basis of their excessive consumption of power and natural resources, particularly fresh water. The announcement noted that New Yorkers have seen their electric bills surge, with the state's average residential electricity price climbing nearly 68 percent since 2019. This fact has skewed public opinion starkly against new data center construction, with major public backlash against proposed facilities in townships such as Lansing and East Fishkill. Leaders of the data center opposition celebrated the governor's decision. "This one-year moratorium is a huge step forward for New York communities fighting against an onslaught of massive data center proposals," stated Laura Shindell, director of New York State's Food & Water Watch, a high-profile environmental nonprofit. "It comes as the direct result of immense public pressure from people across the state demanding their elected leaders protect them from Big Tech's assault, which threatens the state's clean air and water and New Yorkers' financial security." Praise was not limited to environmental and community leaders, however, as it also came from the governor's allies, both in Congress and in the state legislature. ""This one-year moratorium is fundamentally about trust," said Senator Kirsten Gillibrand, in a statement provided to WRGB Albany. "Right now, New Yorkers aren't convinced these massive facilities benefit them. Before we move forward, our communities need ironclad guarantees that their energy bills won't spike, their water will be protected, and their air will remain clean." "Technology should make our lives better, not pollute our water, strain our energy grid, or drive up our utility bills," State Senator Kristen Gonzalez, a Democrat, stated in the New York State announcement. "By giving our State time to plan, we can ensure that development and innovation do not come at the expense of all of us." Many, however, voiced their dissatisfaction, claiming that the moratorium would hinder New York's -- and the United States' - ability to compete in a rapidly expanding technological field. "A statewide moratorium is the wrong answer to the right questions," New York State Assemblyman Scott Gray, a Republican, and three of his colleagues wrote in a letter to the governor in June opposing data center moratoriums. "It freezes investment, takes decisions away from the communities that should be making them and duplicates or ignores work the governor's own administration already has underway." "Siting belongs to local communities. Albany's job is to set the regulatory framework, facilitate interconnection and protect ratepayers and grid reliability," Gray and his colleagues wrote. "It is not Albany's job to decide for a town or village whether it wants one of these projects. That is a local decision, and it should remain one." "China wins," said Pennsylvania Senator John Fetterman in an X post on Tuesday morning. There have been claims made by those building data centers that foreign rivals of the U.S. are supporting the anti-AI movement, and evidence of foreign-created anti-AI content being published for a U.S. audience.

New York to Enact Nation's First Statewide Moratorium on Data Centers

Gov. Kathy Hochul will sign an executive order pausing the construction of the largest data centers for one year while the state assesses their effects on the environment and energy use. Gov. Kathy Hochul of New York is set to sign an executive order on Tuesday placing a one-year pause on the construction of the largest data centers, putting the state at the forefront of the national debate over artificial intelligence companies' impact on American landscapes and energy grids. The order, the first of its kind to be enacted in the United States, will temporarily bar the state from approving permits for so-called hyperscale data centers, which use 50 or more megawatts of power to operate. During the pause, New York will develop a regulatory framework for assessing how these behemoth projects affect the environment. A farther-reaching moratorium passed the State Legislature last month, prompting questions about whether Ms. Hochul, who has championed artificial intelligence as a tool for research and good governance, would be supportive. Ms. Hochul has not yet signed the bill, but said she will continue to consider it. In a statement, Ms. Hochul stressed the importance of balancing innovation with public benefit. "New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too," said the governor, a Democrat who is seeking re-election this year. The order will take effect immediately. It is not expected to affect the data demands of back-office financial services, hospitals or universities. A recent Gallup poll showed that Republicans and Democrats alike oppose data center construction, citing the facilities' rapacious demand for water and energy at a time when electricity costs are rising. President Trump has sought to stymie the backlash against data centers, obtaining a pledge from tech companies that they will pay for the cost of their own energy, while encouraging development more broadly. That approach has led to a Wild West atmosphere, with companies racing to build as many as 1,500 new data centers across the country, from former tobacco fields in Virginia to Native American land along the Columbia River in Washington. The boom has sparked dozens of moratorium proposals at the state and federal level. In March, the Seminole Nation passed a complete moratorium, barring development on the tribe's lands in Oklahoma. In Maine, the State Legislature passed the country's first statewide moratorium, but it was vetoed by Gov. Janet Mills, a Democrat, in April. Other Democratic governors, including Gretchen Whitmer of Michigan and Gavin Newsom of California, have also weighed in on the side of Big Tech, citing the economic opportunities the projects might bring to states still suffering from deindustrialization. Initially it appeared that Ms. Hochul, a pro-business moderate from Buffalo, might fall into the same camp. She had previously said the matter ought to be left to localities, leading some to worry she might veto the moratorium passed by Democrats in Albany. But the demands of the moment prompted Ms. Hochul to weigh in, she said in her statement: "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." There has been considerable speculation about the tension between Ms. Hochul's embrace of artificial intelligence and the state's goals to reduce emissions under its far-reaching 2019 climate law. New York is not on track to meet those goals, though a legislative change to accounting methodology, backed by Ms. Hochul, will bring them closer. In the announcement of the executive order on Tuesday, officials said that during the pause on large-scale data center projects, the state would analyze the potential effects of those projects on water and air quality, as well as energy demand. It is this latter concern that particularly haunts leaders ahead of the midterm elections, as gas prices and utility bills are skyrocketing. Earlier this year, Ms. Hochul took the first steps toward requiring data centers to either provide their own energy -- by building on sites that already have power-generating equipment -- or to pay a premium to buy from the grid. Those rules are expected to be in effect within the next year. When the moratorium is lifted, localities will be free to pursue their own agreements with companies, according to state officials. But the state will provide a framework for those negotiations to empower governments to push for concessions from the companies, like investments in local infrastructure and agreements that projects be built with union labor. The moratorium will not delay projects that already have all the required permits, but will place a hold on those still requiring approval. The broader bill that was passed by the Legislature would bar projects that use 20 megawatts or more, and would institute energy efficiency standards for projects larger than one megawatt, requiring them to use almost entirely renewable energy by 2050. Hochul administration officials said that the governor had issued the order for the sake of expediency but that she would continue to review the legislation and any amendments with the bill's sponsors.

New York Issues the Nation's First Statewide Moratorium on New Large Data Centers

New York is hitting pause on new hyperscale data centers in the state just as the AI boom is supercharging demand for these facilities. Gov. Kathy Hochul singed Tuesday an executive order establishing a temporary moratorium on certain new data centers that consume 50 megawatts or more of power. The move makes New York the first state in the country to impose a statewide moratorium on large data center projects. The order directs the state Department of Environmental Conservation to put on hold discretionary permits and licenses for projects covered by the order that had not been completed by Tuesday. It applies to both new data centers and expansions of existing ones. The moratorium will remain in effect until the Department of Public Service completes a review of the environmental impacts data center construction and operation in the state. The review will asses energy demand, water use, air and water quality, noise levels, and any disproportionate impacts on disadvantaged communities. The review is expected to take about a year to complete, according to a press release. "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 said. Moratoriam is the first to cover an entire state The moratorium arrives as major tech companies like Meta, Amazon, Microsoft, Google, and OpenAI are pouring billions into building out the infrastructure needed to train and run their competing AI models. Collectively, these companies are expected to spend at least $700 billion this year on AI infrastructure and development, according to CNBC. Meanwhile, communities where these projects are planned are increasingly pushing back. A Gallup survey conducted in March found that seven in 10 Americans oppose constructing data centers for artificial intelligence in their local area, including 48% who are strongly opposed. Several local governments have already adopted or explored temporary restrictions on new data center development including Seattle, Minneapolis and several communities in New Jersey, but this is the first state-level moratorium in the country. Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez have also proposed a nationwide moratorium until Congress passes AI legislation that "ensures the safety and prosperity of the American people." The projects, however, have been largely embraced by President Donald Trump's administration, which has argued that rapidly expanding AI infrastructure is crucial to U.S. national security and economic competitiveness with China. Trump, who tech CEOs have spent the past year cozying up to, signed an executive order in December limiting what his administration described as overly burdensome state-level AI regulations. Then, in March, several major AI companies signed a White House pledge promising to cover the power generation and grid upgrades required by their data centers. More than just a pause Still, Hochul's order goes beyond temporarily pausing permits. It also calls for a framework to help local governments negotiate with data center developers for things like infrastructure investments, local hiring, and apprenticeships. The order also calls on state regulators to consider creating a fund requiring data center operators to contribute upfront toward grid upgrades, clean-energy generation and battery storage. Additionally, Hochul is still considering a stricter data center bill passed by state lawmakers last month. That legislation would cover projects consuming 20 megawatts or more, rather than the executive order's 50-megawatt threshold. It would also establish energy-efficiency standards for facilities larger than one megawatt and require them to rely almost entirely on renewable energy by 2050. Hochul also said, at press conference this morning, that she plans to pursue legislation repealing New York's sales-tax exemptions for large data centers.

New York becomes first state to impose data center moratorium

An Amazon data center in Ashburn, Virginia, is seen in October. (Jonathan Ernst/Reuters) New York became the first state in the nation to impose a moratorium on the construction of data centers Tuesday, a striking setback for artificial intelligence companies that politicians once courted for investment but have now triggered public fears about energy prices and water use. Gov. Kathy Hochul (D) signed an executive order pausing environmental permits for large data centers for up to a year, saying the delay would give state officials time to craft rules to protect the electrical grid, the environment and communities where developers want to build. "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 said in a statement. "New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too." The immediate practical impacts of the order are not clear: New York boasts fewer data centers than other states, including Virginia and Texas. But some planned projects in the state have already sparked local skirmishes, and the moratorium marks a major escalation in the battle between the tech industry and many politicians grappling with constituents' concerns about the knock-on effects of the construction boom and economic disruption caused by the AI systems the facilities power. Recent polling shows much of America would be more comfortable with a nuclear power plant in their town than a data center. Even communities that have relied on data centers to balance their local budgets for decades have turned on them, most notably in northern Virginia, the world's epicenter for compute warehouses. The incentives tech companies once dangled to entice communities to approve their projects -- including funding for local schools and promises to fund infrastructure projects -- no longer impress. And officials across the country say they're now looking to claw back tax giveaways, with Hochul also calling on lawmakers Tuesday to repeal sales tax exemptions for data centers. Data centers require an immense amount of power. The U.S. grid is quickly running out of available capacity to accommodate data centers that now use more electricity than entire major cities. Industry and White House officials argue that blocking development of the data centers -- and the power plants that fuel them -- risks ceding leadership in AI innovation to rival countries, a potentially dangerous prospect at a time AI underpins not just the future of the global economy but also advancements in weapons systems. As the backlash has mounted, scores of local communities have passed their own bans, including Monterey Park, California, where voters recently opted to permanently block these operations. Yet calls to block construction on a statewide scale have gained limited traction. Maine Gov. Janet Mills (D) vetoed legislation in April, warning it would jeopardize a project on the site of a former mill in the town of Jay that has community support. The growing opposition has presented a challenge to the Trump administration, which counts speeding up the AI buildout as critical to its domestic policy agenda. Reuters reported Monday that officials are rallying power companies to sign a data center buildout ratepayer protection pledge similar to one leading tech companies have signed. The tech industry's earlier pledge has failed to soothe everyday customers' concerns about the affordability of electricity. Opponents of data centers call it hollow, and point to cases where they say some of the costs for adding power to the grid to serve data centers have been shouldered by everybody else. When monthly electricity bills jumped last year for residential ratepayers on the power grid that serves 13 states from Virginia to Michigan, an independent market monitor found data centers were the major culprit. The issue has also surfaced in this year's midterm elections, with progressives led by Sen. Bernie Sanders (I-Vermont) and Rep. Alexandria Ocasio-Cortez (D-New York) pushing their own moratorium proposals that would apply nationwide. Studies reach conflicting conclusions on whether data centers drive up residential rates, but federal data shows that home energy costs have grown faster than those for commercial and industrial users in recent years. Some energy experts say the large projects could ultimately contribute to power grid stability, and bring prices down for everyone, if the regional energy market is structured right. Hochul's plan for New York, which applies to data centers that consume at least 50 megawatts of energy, is designed to give lawmakers and regulators a year to make any market changes or other regulatory adjustments to protect consumers. The governor's team could not say how many proposed data centers would be affected by the moratorium. But data firm Cleanview lists 25 proposed facilities in the state, and a planned 300-megawatt facility near Ithaca has drawn opposition from local communities. State lawmakers passed a bill in June that also calls for a one-year moratorium, but it has yet to be signed into law. Hochul's office said signing an executive order allowed the governor to move quickly while she reviews the legislation. Mitch Jones, the managing director for policy and litigation at environmental group Food & Water Watch, said his organization would support the governor's order. "This is an important victory for the thousands of New Yorkers who demanded that their government take action to put a pause on hyperscale data centers," Jones said.

New York becomes first state to impose one-year pause on new AI datacenters

Governor Kathy Hochul issued an executive order enacting a moratorium on the large, resource-intensive AI facilities New York became the first US state to enact a moratorium on new datacenters on Tuesday. Governor Kathy Hochul issued an executive order mandating a one-year statewide pause on the large facilities used to power artificial intelligence products. "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, a Democrat, said in a statement. The order will pause the state permitting process for proposed "hyperscale" datacenters, defined as having electrical capacity of more than 50 megawatts, and direct state regulators to create standards focused on environmental impacts, energy demand, water usage and other factors, the governor's office said. The appetite for datacenter moratoriums is growing nationally as anger grows over the facilities' effects on energy prices and local environments. Almost three-quarters of Americans oppose a datacenter project being built near their homes, according to a new Heatmap poll. More than a dozen states have considered moratoria in response to residents' fears about the potential costs of living next to datacenters, especially higher utility bills and negative environmental impacts. Maine is the only other state which approved a moratorium through its legislature, but its governor vetoed the measure in April. A small city in southern California became the first municipality to enact a moratorium on construction last month, followed soon after by Seattle, the largest city to do so. A June poll from the Siena Research Institute found that 46% of New Yorkers felt a one-year moratorium on new permits for large datacenters in the state would be good for New York, and 21% felt it would be bad for New York. New York's state legislature had already approved a one-year statewide moratorium bill that also included provisions for an environmental impact report, and new labor, energy efficiency and transparency standards. Hochul has so far not greenlit that legislation, but the state senator who authored that bill, Kristen Gonzalez, welcomed her executive order. "With this executive order, Governor Hochul is protecting everyday New Yorkers with a first in the nation moratorium on new large data centers. By giving our state time to plan, we can ensure that development and innovation do not come at the expense of all of us."

'New York will lead the way': NYS Gov. Hochul's data center moratorium includes a new model for funding AI infrastructure | Fortune

New York became the first state to enact a statewide moratorium on hyperscale data centers, halting any new development until July 2027, giving state regulators a year to create new standards regarding environmental impacts and energy demands, and marking one of the biggest political pushbacks against the AI infrastructure boom yet. "New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too," said Gov. Kathy Hochul in a statement. Hochul signed the executive order Tuesday morning, establishing the one-year moratorium in state environmental permitting in response to the growing public concern over rising utility costs and demand for energy and water resources. The temporary pause applies to data centers requiring 50 megawatts or more of power while the state develops a new regulatory framework. Data center projects that have already received permits are exempt from the order. Also in the order is a special carveout: The creation of the New York Grid Acceleration Fund, a proposed fund that would require data centers to invest in the state's aging grid infrastructure and energy needs. Hochul, in signing the order, directed the Department of Public Service (DPS) to consider creating the fund to help support the procurement of a clean energy supply and establish an insurance pool to protect against large loads. Hochul tasked DPS with several projects including the start of the Energize NY proceeding where data centers pay more for their energy or supply their own, keeping energy more affordable for New Yorkers. DPS must also develop an Environmental Impact Statement (EIS) to ensure these data centers are held to "consistent statewide standards" while evaluating their effects on water resources, electricity demand, land use, pollution, and other potential environmental impacts. "New York has always been at the forefront of innovation and change but we've also always guaranteed that New Yorkers benefit," said Hochul in her announcement of the order Tuesday morning. "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." A rising tide against data centers New York's move comes as data center development accelerates nationwide and lawmakers in more than a dozen states consider similar restrictions -- but none have so far issued a moratorium on all construction. Maine Gov. Janet Mills agreed with a moratorium bill that passed her desk but ultimately didn't sign it since it didn't include an exemption for a $550 million data center redevelopment of a shuttered paper mill. Last month, Arizona Gov. Katie Hobbs signed a budget bill that imposes a three-year moratorium on new data center sales tax exemptions. Smaller cities have seen these effects like in Cheyenne, Wyoming where officials said Meta's data center construction was responsible for the contamination of part of the town's recycled water system. In Hochul's executive order Tuesday, the governor directed Empire State Development to issue a Community Investment Framework within 60 days to help local governments negotiate benefits such as infrastructure improvements, workforce development, child care investments, and direct financial support. The framework will also include a formula to help communities figure out where to start investment negotiations. The country's first statement moratorium comes after President Donald Trump warned states against regulating AI, raising questions around how governments should capture the value created by the technology. Trump has separately pushed for a federal sovereign wealth fund, directing federal agencies to develop a plan for an investment vehicle designed to build long-term national wealth. He joins Sen. Bernie Sanders in that call. While Trump's proposal extends beyond AI, Hochul's proposed New York Grid Acceleration Fund reflects a similar idea at the state level by requiring large data centers to invest in grid upgrades and other infrastructure needs. According to a recent Reuters/Ipsos poll, one-in-three Americans approve of the speed of data-center construction and most oppose building one in their own community. A recent poll also showed Americans overwhelmingly would choose to live near nuclear power plants rather than a data center. The AI boom isn't slowing, but New York's move suggests its infrastructure phase is entering a new era, where expansion comes with conditions, and resistance is becoming policy.

New York Becomes First State to Ban AI Data Centers

Can't-miss innovations from the bleeding edge of science and tech Across the United States, lawmakers are increasingly caught between two competing pressures: the massive investment flowing into the tech industry to build AI data centers, and a growing, bipartisan backlash against those same facilities, not to mention the massive tech corporations funding them. In New York, governor Kathy Hochul is giving in to the former -- at least on paper -- by announcing a one-year, state-wide ban on new AI data center construction for facilities with an electrical capacity of 50 megawatts and up. It's the first time a US state has imposed such a moratorium, highlighting persistent concerns over the rampant pollution, alarming water usage rates, and rising electricity prices. Per the City Reporter, the governor has ordered state utility regulators to draft "the strongest standards in the nation for data center development," in order to guarantee that "when companies succeed because of New York, New Yorkers succeed too." While the moratorium prevents new mega-facilities from popping up, the New York Department of Public Service will start plugging away on an environmental impact statement to use for assessing future data centers' affects on water and air quality, in addition to their consumption of electricity and water. The timing of the temporary ban could not be more opportune for Democrats. With the 2026 midterm elections fast approaching, Democratic party leaders have been scrambling to regain the confidence of the party's voting base, which has overwhelmingly embraced progressive, non-establishment Democratic candidates in recent elections. As Futurism noted back in April, opposition to AI would be a slam dunk with progressive voters and even moderate Republicans -- though the party has been slow to capitalize on this opportunity, likely a result of the deep pocketed AI lobby, which has lavished the Democratic party with millions of dollars so-far in 2026. Notably, Hochul's ban comes in place of a bill passed by the New York State Senate on June 4 which would ban data centers of 20 megawatts or more for up to a year. In addition to raising the maximum allowable size by 30 megawatts, Hochul's executive order lacks other provisions included in the Senate bill, like a mandate that data center owners fund local infrastructure programs and submit to third-party audits. While the governor's total ban is progressive relative to states like Ohio, the gap between the New York Senate bill and Hochul's executive order clearly reflects the ongoing schism within the Democratic party. In effect, it signals that Hochul is ever-so-slightly less gung-ho about regulating the tech industry than her counterparts in the state legislature, putting her in a league more in-line with pro-tech industry Democrats like Michigan's Gretchen Whitmer and California's Gavin Newsom, and less with party progressives like Vermont's Bernie Sanders. More on AI data centers: The Economics of Data Centers Creating Jobs Are So Bad That They Sound Like a Joke

New York to impose the country's first statewide moratorium on data centers

NEW YORK -- New York will block the construction of any new large data centers for up to a year so the state can create rules to protect the environment and energy grid from the power-hungry facilities that fuel artificial intelligence technology. Gov. Kathy Hochul is set to sign an executive order Tuesday morning 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. "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, a Democrat, said in a statement. The order will pause state permitting for new large data centers and direct state regulators to create standards that address environmental impacts, energy demand, water usage and other factors, the governor's office said. Tech companies and other backers have argued moves to block the construction of data centers hurt job growth for local communities and cede ground to China in a race to lead in the rapidly growing AI industry. Earlier this year, Maine seemed poised to establish a similar moratorium. But the measure was vetoed by the state's Democratic Gov. Janet Mills because it would have blocked a proposed data center in a town that has struggled following the closure of a local mill. 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. 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 and other pocketbook issues. 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. 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 is opting for an executive order that would take effect immediately once signed. New York, at this stage, has not been a destination for the biggest hyperscale data centers.

NY pauses new large data center projects for one year

New York (AFP) - New York will stop issuing permits for new large-scale data centers in the state for one year, according to an order signed by the governor on Tuesday. The pause will give the state time to develop regulation for the rapidly expanding sector, fired by growing demand for artificial intelligence. Critics of data centers point to their high electricity consumption, which can strain local grids and inflate energy bills, as well as their heavy water use, noise generation and the relatively small number of jobs they create. "New York has always been at the forefront of innovation and change but we've also always guaranteed that New Yorkers benefit," New York state Governor Kathy Hochul said. "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. "New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too." US data center construction spending has surged in recent years, with tech firms pouring tens of billions of dollars into building out infrastructure. A similar measure passed in Maine in April but was ultimately vetoed by the state's governor. A June study by Allianz Trade estimated the centers emitted 286 million tonnes of carbon dioxide in 2025. AI already accounts for between 15 and 20 percent of electricity consumption at data centers, and this share could climb to 40 percent by 2030, the report said.

New York becomes first US state to impose a data center moratorium

New York becomes first US state to impose a data center moratorium New York became the first state in the U.S. to impose a statewide moratorium on new data centers today after Governor Kathy Hochul signed an executive order pausing state environmental permits for large facilities for up to a year. Executive Order No. 62 took effect on signing and covers hyperscale data centers that draw 50 megawatts of power or more. While it is in force, the state Department of Environmental Conservation will not issue discretionary permits that have not already been deemed complete. Hochul cast the pause as a response to the computing demand unleashed by artificial intelligence, which she said threatens to push up electricity bills and drain the state's energy and water supplies. Proposals for large facilities have piled up across New York, each one capable of consuming enormous amounts of power and water to run and cool thousands of servers. "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 said in announcing the order. "New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too." The year gives regulators time to write rules for an industry that has outrun them. Hochul directed the Department of Public Service to produce a Generic Environmental Impact Statement, a review expected to run up to a year, that will set consistent standards for judging a data center's effect on energy demand, water use and quality and air quality. Once those standards are final, the moratorium lifts and projects can move ahead as long as they clear state zoning codes and local approvals. The order does more than stop the clock. Hochul told Empire State Development to publish a Community Investment Framework within 60 days, giving towns and counties a template for negotiating benefits from developers, from local infrastructure and child care funding to direct payments. The framework also pushes prevailing wage, project labor agreements, local hiring and apprenticeships on data center construction. Hochul is separately weighing a New York Grid Acceleration Fund that would make data centers pay into the state's aging power infrastructure and she said she will pursue legislation to repeal the sales tax exemptions that large facilities across the state now enjoy. Projects already on the drawing board could get caught. A $19.4 billion data center proposed in Genesee County has drawn heavy local opposition and the kind of project the order can reach, an aide told Axios. "To the extent there are projects that still need discretionary permits, we do expect this to impact them," the aide said. The order also lets Hochul avoid a decision on legislation. State lawmakers passed the Responsible Data Center Development Act in June, but the governor has not signed it. An aide called the bill complicated and said an executive order was the fastest way to act now. The legislation reaches further in places, covering projects above 20 megawatts, setting up separate electricity and water rate classes and requiring a public hearing before any permit. New York is the first state to go this far, though it is not alone in moving against the industry. Dozens of cities and counties have passed their own data center bans and last month Arizona Governor Katie Hobbs signed a three-year moratorium on new sales tax breaks for the facilities.

New York, a state without nearly any data centers, becomes first to ban their construction | Fortune

Gov. Kathy Hochul signed an executive order 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 puts the state in the center of a national debate over how to regulate the AI industry, as concerns over rising electric bills and environmental risks collide with the need to stimulate local economies and foster the U.S. tech sector. "It's my responsibility to take action and lead," Hochul, a Democrat, said in a statement. In effect, the executive order pauses state permitting for new large data centers and direct state regulators to create standards that address environmental impacts, energy demand, water usage and other factors, the governor's office said. 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. 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. 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. New York, at this stage, has not been a destination for the biggest hyperscale data centers.

New York to Impose the Country's First Statewide Moratorium on Data Centers

NEW YORK (AP) -- New York will block the construction of any new large data centers for up to a year so the state can create rules to protect the environment and energy grid from the power-hungry facilities that fuel artificial intelligence technology. Gov. Kathy Hochul is set to sign an executive order Tuesday morning 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. "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, a Democrat, said in a statement. The order will pause state permitting for new large data centers and direct state regulators to create standards that address environmental impacts, energy demand, water usage and other factors, the governor's office said. Tech companies and other backers have argued moves to block the construction of data centers hurt job growth for local communities and cede ground to China in a race to lead in the rapidly growing AI industry. Earlier this year, Maine seemed poised to establish a similar moratorium. But the measure was vetoed by the state's Democratic Gov. Janet Mills because it would have blocked a proposed data center in a town that has struggled following the closure of a local mill. 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. 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 and other pocketbook issues. 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. 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 is opting for an executive order that would take effect immediately once signed. New York, at this stage, has not been a destination for the biggest hyperscale data centers.

New York becomes first US state to impose a data center moratorium

The moratorium positions New York at the forefront of a growing national debate over how to manage the infrastructure needed to support artificial intelligence. While technology companies are racing to build new data centers, lawmakers and regulators in dozens of states ⁠are weighing ⁠measures to limit their effect on electricity grids, utility bills and local communities. New York became the first US state on Tuesday to halt construction of large new data centers, imposing a one-year moratorium as concerns grow that the facilities driving the artificial-intelligence boom are raising power costs, straining water supplies and burdening local communities. The moratorium positions New York at the forefront of a growing national debate over how to manage the infrastructure needed to support artificial intelligence. While technology companies are racing to build new data centers, lawmakers and regulators in dozens of states ⁠are weighing ⁠measures to limit their effect on electricity grids, utility bills and local communities. "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," said Hochul, who said she will also pursue legislation to repeal sales tax exemptions for large data centers. The construction ban will apply to data centers that use 50 megawatts or more of power, officials in the governor's office said. During the moratorium, the state's Department of Environmental Conservation will not issue any discretionary ⁠permits not already deemed complete, the governor's office said. Instead, Hochul directed state officials to develop a Generic Environmental Impact Statement (GEIS) to ensure that new data centers coming online are being held to "consistent standards," ⁠as well as examine the potential environmental impacts of the construction and operation of data centers in the state. The ban will be lifted once the state finalizes those standards, according to Hochul's office. DATA CENTERS SPARK BACKLASH New York's legislature last month passed a bill meant to impose guardrails on data centers, but it has not yet been sent to Hochul's desk for signing. Officials in her office described the bill as complicated, adding that "it's going to take some time to work through" with the state legislature. The expansion of data centers in the US is driving up power demand - and electricity bills - in large swaths of the country, drawing local and political backlash. Only one-in-three Americans approve of the fast pace of data-center construction and most would oppose building one in their own community, according to a recent Reuters/Ipsos poll. Dozens ⁠of state legislatures have introduced bills to rein in the effects of data centers on power bills and the environment. New York is the first to enact a full moratorium. In April, Maine Governor Janet Mills vetoed a bill that would have imposed a similar freeze on those facilities. As of May, there were more than 12 gigawatts of very large energy-using loads, including data centers, in line to connect to the state's grid, according to a recent report by the New York independent grid operator. The state has the eighth-most expensive retail price for residential electricity in the country, according to US Energy Department data.

New York Becomes the First State to Impose a Data Center Moratorium

July 14 (Reuters) - New York became the first U.S. state ⁠on ⁠Tuesday to halt construction of large new ⁠data centers, imposing a one-year moratorium as concerns grow that the facilities driving the artificial-intelligence boom are raising power costs, straining water supplies and burdening local communities. The moratorium positions New York at the forefront of a growing national debate over how to manage the infrastructure needed to support artificial intelligence. While technology companies are racing to build new data centers, lawmakers and regulators in ⁠dozens of states ⁠are weighing measures to limit their effect on electricity grids, utility bills and local communities. "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," said Hochul, who said she will also pursue legislation to repeal sales tax exemptions for large data centers. The construction ban will apply to data centers that use 50 megawatts or more of power, officials in the governor's ⁠office ⁠said. During the moratorium, the state's Department ⁠of Environmental Conservation will not issue any discretionary permits not already deemed complete, the governor's office said. Instead, Hochul directed state officials to develop a Generic Environmental Impact Statement (GEIS) ⁠to ensure that new data centers coming online are being held to "consistent standards," as well as examine the potential environmental impacts of the construction and operation of data centers in the state. The ban will be lifted once the state finalizes those standards, according to Hochul's office. DATA CENTERS SPARK BACKLASH New York's legislature last month passed a bill meant to impose guardrails on data centers, but it ⁠has not yet been sent to Hochul's desk for signing. Officials in her office described the bill ⁠as complicated, adding that "it's going to take some time to work through" with the state legislature. The expansion of data centers in the U.S. is driving up power demand -- and electricity bills -- in large swaths of the country, drawing local and political backlash. Only one-in-three Americans approve of the fast pace of data-center construction and most would oppose building one in their own community, according to a recent Reuters/Ipsos poll. Dozens of state legislatures have introduced bills to rein in the effects of data centers on power bills and the environment. New York is the first to enact a full moratorium. In April, Maine Governor Janet Mills vetoed a bill that would have imposed ⁠a similar freeze on those facilities. As of May, there were more than 12 gigawatts of very large energy-using loads, including data centers, in line to connect to the state's grid, according to a recent report by the New York independent grid operator. The state has the eighth-most expensive retail price for residential electricity in the country, according to U.S. Energy Department data. (Reporting by Jasper Ward in Washington; Additional reporting by Laila Kearney, Courtney Rozen, and Valerie Volocvici; editing by David Gaffen)

New York Just Hit Brakes on AI: Kathy Hochul To Reportedly Freeze New 50 MW Data Centers Amid Grid Strain

New York Gov. Kathy Hochul, on Tuesday, reportedly ordered the nation's first statewide pause on new hyperscale data centers, temporarily halting environmental permits for up to a year. She said the state would use the pause to develop what she called the nation's "strongest standards" for future data center development. Hochul is expected to sign an executive order for the same on Tuesday, while her administration continues reviewing related legislation. The temporary measures, which could remain in place for up to a year, aim to address environmental impacts, establish a regulatory framework, and require large data centers to contribute to the electric grid. The New York Governor is also expected to support ending a sales tax exemption for large data centers, subject to legislative approval. Kathy Hochul's office did not immediately respond to Benzinga's request for comments States Split on Data Centers The move comes amid growing opposition to AI data centers over concerns about their massive energy consumption, environmental impact, and strain on power grids. While several municipalities have paused new data center projects, no U.S. state has enacted a full moratorium after Maine's proposed statewide ban was vetoed by Governor Janet Mills. The decision also has political implications, with Hochul positioning the move as part of a broader effort to address rising energy costs ahead of her reelection campaign. Her Republican challenger, Bruce Blakeman, opposes a statewide moratorium, arguing local governments should decide whether to approve data center projects based on their economic benefits. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image Credit: Seth Harrison/The Journal News / USA TODAY NETWORK via Imagn Images Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Hochul's Data Center Moratorium Lands as $130 Billion in Projects Stalled Nationwide in a Single Quarter

In a first-of-its-kind move, New York State Governor Kathy Hochul has declared a state-level moratorium on data center construction. Hochul's decision follows growing concerns about the resource-intensive computing centers that are necessary to power what is being dubbed the next industrial revolution. Most AI data centers are powered by NVIDIA Corporation's GPUs, with the average data center requiring millions of gallons of water daily to perform efficiently. New York State Data Center Construction To Be Paused In Moratorium Being Signed Tomorrow In her statement, Governor Hochul outlined that the resource-intensive nature of data centers was at the center of her decision to introduce a moratorium. "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," she said. Her actions against the computing facilities could extend beyond that as the Governor aims to remove sales tax subsidies for data centers. Additionally, Hochul's action follows after the New York legislature approved a one-year data center construction pause in June. According to the Governor's office, the one-year moratorium will ensure that a regulatory framework to protect utility customers and the environment is in place. "New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too," said the Governor. Her executive order for the moratorium also follows the trend of growing resistance to data centers across America. On a local level, in states such as North Carolina, counties have paused data center buildouts. Others, such as those in North Carolina and Virginia, have either resorted to lawsuits or defeated proposals to build the computing facilities. According to data from Data Center Watch, at least 75 data centers that were cumulatively worth $130 billion were blocked or delayed in the first quarter of 2026. This figure was higher than the total figure of 2025. Additionally, 14 states introduced moratorium legislation, with the one in Maine falling short by one vote. As part of her order, Hochul also directed the Empire State Development (ESD) to run an analysis in order to determine the benefits of data centers and to avoid the negative effects. The ESD will post a Community Investment Framework (CIF), which will coordinate investments by data center operators to "advance the long-term economic vitality and quality of life of the host community." Follow Wccftech on Google to get more of our news coverage in your feeds.

New York becomes the first state to impose a data center moratorium

New York has paused large data center construction for one year. This action addresses concerns about rising power costs and strained water supplies. Governor Hochul aims to establish consistent environmental standards for future facilities. The state's legislature is also considering new data center regulations. This moratorium positions New York at the forefront of a national debate. New York became the first U.S. state on Tuesday to halt construction of large new data centers, imposing a one-year moratorium as concerns grow that the facilities driving the artificial-intelligence boom are raising power costs, straining water supplies and burdening local communities. The moratorium positions New York at the forefront of a growing national debate over how to manage the infrastructure needed to support artificial intelligence. While technology companies are racing to build new data centers, lawmakers and regulators in dozens of states ⁠are weighing ⁠measures to limit their effect on electricity grids, utility bills and local communities. "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," said Hochul, who said she will also pursue legislation to repeal sales tax exemptions for large data centers. The construction ban will apply to data centers that use 50 megawatts or more of power, officials in the governor's office said. During the moratorium, the state's Department of Environmental Conservation will not issue any discretionary ⁠permits not already deemed complete, the governor's office said. Instead, Hochul directed state officials to develop a Generic Environmental Impact Statement (GEIS) to ensure that new data centers coming online are being held to "consistent standards," ⁠as well as examine the potential environmental impacts of the construction and operation of data centers in the state. The ban will be lifted once the state finalizes those standards, according to Hochul's office. DATA CENTERS SPARK BACKLASHNew York's legislature last month passed a bill meant to impose guardrails on data centers, but it has not yet been sent to Hochul's desk for signing. Officials in her office described the bill as complicated, adding that "it's going to take some time to work through" with the state legislature. The expansion of data centers in the U.S. is driving up power demand - and electricity bills - in large swaths of the country, drawing local and political backlash. Only one-in-three Americans approve of the fast pace of data-center construction and most would oppose building one in their own community, according to a recent Reuters/Ipsos poll. Dozens ⁠of state legislatures have introduced bills to rein in the effects of data centers on power bills and the environment. New York is the first to enact a full moratorium. In April, Maine Governor Janet Mills vetoed a bill that would have imposed a similar freeze on those facilities. As of May, there were more than 12 gigawatts of very large energy-using loads, including data centers, in line to connect to the state's grid, according to a recent report by the New York independent grid operator. The state has the eighth-most expensive retail price for residential electricity in the country, according to U.S. Energy Department data.

New York to impose the country's first statewide moratorium on data centers - The Korea Times

New York will block the construction of any new large data centers for up to a year so the state can create rules to protect the environment and energy grid from the power-hungry facilities that fuel artificial intelligence technology. Gov. Kathy Hochul is set to sign an executive order Tuesday morning 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. "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, a Democrat, said in a statement. The order will pause state permitting for new large data centers and direct state regulators to create standards that address environmental impacts, energy demand, water usage and other factors, the governor's office said. Tech companies and other backers have argued moves to block the construction of data centers hurt job growth for local communities and cede ground to China in a race to lead in the rapidly growing AI industry. Earlier this year, Maine seemed poised to establish a similar moratorium. But the measure was vetoed by the state's Democratic Gov. Janet Mills because it would have blocked a proposed data center in a town that has struggled following the closure of a local mill. 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. 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 and other pocketbook issues. 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. 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 is opting for an executive order that would take effect immediately once signed. New York, at this stage, has not been a destination for the biggest hyperscale data centers.

Gov. Kathy Hochul orders election year 'pause' on new large-scale data centers to power AI in NY

New York state regulators won't issue environmental permits for large-scale data centers for the next year, Gov. Kathy Hochul announced Tuesday. Hochul will sign an executive order implementing a "moratorium" on new air permits for so-called "hyperscale" data centers trying to tap into the Empire State's electrical grid for up to a year. "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," she wrote in a statement. "New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too," she continued. Rapid new demand for the massive computer-packed complexes has been spurred by artificial intelligence and other high-intensity services in recent years, but the facilities require large amounts of electricity. Roughly half of New York voters polled by Siena University last month said they thought a one-year moratorium on large data centers was good for the state, while 21% said they thought it was a bad idea and 17% indicated they were somewhere in the middle. The moratorium only applies to new applications for "up to a year" while the state undergoes a study and comes up with more new regulations on data centers. "Once the State finalizes these standards, the moratorium will be lifted, allowing new data center projects to proceed as long as they follow state, zoning code and other local approvals," Hochul noted. The move falls short of a far more restrictive proposal passed by the state legislature earlier this year that would've included requirements that data center operations set a union-friendly prevailing wage standard and derive large amounts of their power from renewable sources. Business groups fought the legislation.

New York won't build big data centres for a year as it weighs energy and climate risks

NEW YORK -- No large data centres 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 centres, 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 centre 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 centres and directs state regulators to create standards that address environmental impacts, energy demand, water usage and other factors, the governor's office said. 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 centre projects that promise enough economic benefits. 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 centres.

New York to impose the country's first statewide moratorium on data centres

NEW YORK -- New York will block the construction of any new large data centres for up to a year so the state can create rules to protect the environment and energy grid from the power-hungry facilities that fuel artificial intelligence technology. Gov. Kathy Hochul is set to sign an executive order Tuesday morning imposing the country's first statewide moratorium on hyperscale data centres, which house thousands of computer servers and require massive amounts of energy and a steady supply of water to keep cool. "As data centre 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, a Democrat, said in a statement. The order will pause state permitting for new large data centres and direct state regulators to create standards that address environmental impacts, energy demand, water usage and other factors, the governor's office said. Tech companies and other backers have argued moves to block the construction of data centres hurt job growth for local communities and cede ground to China in a race to lead in the rapidly growing AI industry. Earlier this year, Maine seemed poised to establish a similar moratorium. But the measure was vetoed by the state's Democratic Gov. Janet Mills because it would have blocked a proposed data centre in a town that has struggled following the closure of a local mill. 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. 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 and other pocketbook issues. 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 centre projects that promise enough economic benefits. 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 is opting for an executive order that would take effect immediately once signed. New York, at this stage, has not been a destination for the biggest hyperscale data centres.

Hochul announces one-year moratorium on large new data centers

STORY: :: New York becomes the first U.S. state to impose a data center moratorium :: July 14, 2026 :: Gov. Kathy Hochul, (D) New York "These hyperscale AI data centers consume enormous amounts of power, truly threatening to outpace our grid's capacity, and they drive up costs for local rate payers. And I refuse to let those costs be passed on to New Yorkers, who already pay too much for their utility bills. These data centers require millions of gallons of water, straining the local supplies, and when powered by fossil fuels, they drive up our carbon footprint. They occupy massive amounts of land, potentially displacing agricultural space and open spaces." // "The bottom line is 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. That is why today I'll be signing the nation's first ever statewide moratorium on hyperscale data centers." The moratorium positions New York at the forefront of a growing national debate over how to manage the infrastructure needed to support AI. While technology companies are racing to build new data centers, lawmakers and regulators in dozens of states are weighing measures to limit their effect on electricity grids, utility bills and local communities. The construction ban will apply to data centers that use 50 megawatts or more of power, officials in the governor's office said. During the moratorium, the state's Department of Environmental Conservation will not issue any discretionary permits not already deemed complete, the governor's office said. So-called hyperscalers Alphabet, Microsoft, Meta, Amazon and Oracle did not immediately respond to requests for comment on New York's move, nor did data center operators Digital Realty, Equinix and NTT Data.