New York has become the first U.S. state to impose a one-year moratorium on the construction of large new data centres, citing growing concerns over rising electricity costs, environmental impacts and pressure on local communities caused by the rapid expansion of artificial intelligence (AI) infrastructure.
Governor Kathy Hochul announced the executive order on Tuesday, saying the state must act as data centre development increasingly threatens to drive up utility bills, consume natural resources and create uncertainty for residents.
The temporary ban applies to new data centres requiring 50 megawatts or more of electricity. During the one-year moratorium, the New York State Department of Environmental Conservation will not issue discretionary permits for eligible projects that have not already completed the permitting process.
The governor also directed state agencies to prepare a Generic Environmental Impact Statement to establish consistent environmental standards for future data centres and assess their long-term impact on electricity demand, water resources and surrounding communities. The ban will be lifted once those standards are finalised.
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The decision comes as lawmakers across the United States debate how to regulate the rapidly growing number of data centres supporting AI technologies. A bill passed by the New York Legislature last month proposes additional restrictions on facilities using more than 20 megawatts of power, although it has yet to receive the governor’s approval.
Major technology companies, including Alphabet and Microsoft, declined to comment, while Digital Realty warned the move could push investment to other states. NTT Global Data Centers said the industry should engage more openly with communities regarding the economic and environmental effects of such facilities.
According to the New York Independent System Operator, more than 12 gigawatts of large electricity-consuming projects, including data centres, are currently awaiting grid connection. New York currently hosts over 130 data centres, significantly fewer than Virginia and Texas, which remain the country’s largest data centre hubs.