New York halts construction of all new data centers

New York has become the first US state to halt data center construction, after Governor Kathy Hochul signed an executive order barring the state from approving new permits for large projects. The order applies to data centers of 50 megawatts or larger — potentially affecting more than a dozen projects — and the state’s Department of Environmental Conservation will not issue any permits that have not already been completed.

“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 centers 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 lift once the state finalizes an environmental review process for data centers, which Hochul expects will take about a year. Her office is also considering a fund that would have data centers pay into the state’s electrical grid, and she would like to end hyperscale data centers’ eligibility for tax benefits.

The order follows more stringent measures already moving through the state legislature: a bill advanced last month would pause construction of data centers larger than 20 megawatts for one year, while another still in committee would impose a three-year moratorium. The backlash spans both resource concerns and broader unease about AI — a recent Pew Research report found only 10% of Americans were more excited than concerned about AI’s role in daily life, and just 23% believed the technology would have a positive impact on how people do their jobs. The average data center built in recent years has been smaller than 100 megawatts, but those still in development are expected to be much larger — nearly a quarter of new data centers are projected to exceed 500 megawatts through 2030, according to BloombergNEF. Two-thirds of respondents to a recent poll said they were concerned about data centers driving up electricity prices, and another survey found people would rather have an Amazon warehouse in their backyard than a data center.

New York is the first state to put a moratorium into practice, though the idea has circulated nationally: more than 230 organizations called for a nationwide pause in December, and Vermont Sen. Bernie Sanders has proposed one without gaining traction. Maine’s legislature passed a similar pause through November 2027, but Governor Janet Mills vetoed it. Hochul’s order could also put New York at odds with the Trump administration, which has backed data center development — last month the Federal Energy Regulatory Commission, led by a Trump appointee, told grid operators to build fast lanes for data center interconnections.

Why it matters

New York’s move gives other states and federal regulators a concrete template for slowing data center buildout — and sets up a possible clash with a Trump administration that has pushed to accelerate the same projects through faster grid interconnections.