New York Pauses Approval of Large Data Centres With Statewide Moratorium

New York has become the first U.S. state to temporarily halt approvals for new large-scale data centres, marking a significant policy shift as officials weigh the environmental and infrastructure impacts of rapidly expanding artificial intelligence facilities. Gov. Kathy Hochul signed an executive order that immediately pauses approvals for data centres with power demands of 50 megawatts or more while the state develops a formal environmental review process.

The order directs the New York State Department of Environmental Conservation to withhold permits for qualifying projects that have not already completed the approval process. Hochul said the temporary moratorium is intended to ensure that future projects are evaluated for their effects on local communities, natural resources, water supplies, and the state's electrical grid before construction proceeds.

"Progress shouldn't arrive with a higher utility bill, depleted water supply, or noise pollution," Hochul said during 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 governor expects the environmental review process to take about one year. During that time, her administration is also considering requiring large data centre operators to contribute to a fund that would help strengthen New York’s electric grid. Hochul has also expressed support for limiting tax incentives currently available for hyperscale data centre developments.

The executive order arrives as lawmakers in Albany consider stricter legislation. One proposal that recently advanced through the state legislature would impose a one-year pause on new data centres larger than 20 megawatts. At the same time, another bill still under consideration would establish a three-year statewide moratorium.

Concerns about data centre expansion have grown alongside the rapid adoption of artificial intelligence. While electricity demand, water consumption, and land use remain central issues, public attitudes toward AI have also influenced the debate. A recent Pew Research Centre survey found that only 10% of Americans were more excited than concerned about AI’s growing role in daily life. Just 23% believed the technology would improve people’s jobs, while fewer than one-quarter expected AI to strengthen the economy. Less than one-third expressed confidence that government agencies would regulate AI responsibly.

The size of new data centres has also increased dramatically as companies invest more heavily in AI infrastructure. BloombergNEF projects that nearly one-quarter of new facilities built through 2030 will require more than 500 megawatts of electricity, reflecting the growing computing demands of advanced AI systems. Although many data centres constructed in recent years have been smaller than 100 megawatts, developers are planning substantially larger campuses to support future workloads.

Public opinion toward large data centres has shifted in recent years as communities raise concerns about higher electricity prices, increased water consumption, and the loss of farmland. According to recent polling cited in the source material, roughly two-thirds of respondents expressed concern that new data centres could increase electricity costs. At the same time, another survey found that many people would rather live near an Amazon warehouse than a data centre.

New York’s decision also contrasts with recent federal efforts to accelerate AI infrastructure development. Last month, the Federal Energy Regulatory Commission, led by a Trump appointee, directed grid operators to develop expedited interconnection processes intended to bring new data centres online more quickly.

As AI investment continues to drive demand for larger computing facilities, New York’s temporary moratorium could become a closely watched test of how states balance economic development with environmental protection, local oversight, and the increasing strain placed on public infrastructure.