On Tuesday, New York made headlines for becoming the first American state to halt construction of large new data centres amid fast-growing concerns pertaining to power costs and water supplies. The state has not turned its back on artificial intelligence, nor has it declared digital infrastructure undesirable. It has simply acknowledged what many governments are now learning the hard way: the machinery behind the digital economy is not weightless.
The moratorium applies to data centres requiring 50MW or more of electricity. During the pause, New York will develop environmental standards before allowing such facilities to proceed. There were reportedly more than 12 GW of large energy loads, including data centres, waiting to connect to the state’s grid. To put things in perspective, one gigawatt can power roughly 750,000 homes.
Writing closer to home, last year, Islamabad announced a 2,000 MW allocation for Bitcoin mining and AI data centres, presenting surplus electricity as an opportunity. Private investment is also arriving. Gul Ahmed’s Quantum Global Data Centre has announced a $230m project in Karachi, with investment potentially rising to $600m over three to four years. All this means an even stronger case for building domestic cloud capacity. Hospitals, banks, universities, exporters, public services and technology firms cannot remain permanently dependent on imported computing power.
The question is whether the state has counted the cost. Pakistan’s power sector is still weighed down by circular debt, idle-capacity payments, high tariffs and repeated IMF-linked reforms. Households complain of unaffordable bills while exporters say power costs make them uncompetitive. In such a setting, any decision to offer data centres preferential supply or concessional tariffs will be politically explosive unless it is transparent, justified and tied to measurable public benefit.
Water is no smaller concern.
Similarly, a country already under severe water stress cannot treat groundwater, municipal supply or recycled water as afterthoughts. Nor can climate claims survive if facilities turn to captive fossil-fuel generation whenever the grid falters.
The state must also distinguish between different uses. Cloud infrastructure, sovereign data storage, cybersecurity, fintech rails, health records and AI research may serve public and economic goals. Bitcoin mining is harder to defend as industrial policy. It is energy-intensive, speculative and far less clearly linked to productivity, jobs or technological upgrading.
The International Energy Agency estimates that global data-centre electricity consumption could more than double by 2030. Pakistan does not have the luxury of improvising as this demand arrives. Before ribbon-cuttings, we need siting rules, water-use limits, grid-impact assessments, emissions requirements and a transparent tariff policy. Data centres are part of the future. No qualms about that. However, they should not and cannot be allowed to become yet another unpriced burden placed on citizens already paying for the mistakes of the past. *