New York is poised to initiate a one-year halt on the development of large-scale data centers as part of a strategy to establish regulations that safeguard the environment and the energy grid from the immense demands of facilities that power artificial intelligence applications.
Governor Kathy Hochul is expected to sign an executive order on Tuesday, which will impose the nation’s first statewide moratorium on hyperscale data centers—complexes that contain thousands of computer servers and require significant energy and ample water resources for cooling purposes.
“In light of concerns that the growth of data centers could lead to increased utility costs, depletion of our natural resources, and uncertainty for New Yorkers, it is my duty to take the lead and enact change,” Hochul, a Democrat, stated.
The executive order will put a hold on state permits for new large data centers and will instruct state regulators to develop guidelines that consider environmental impacts, energy requirements, and water consumption, as detailed by the governor’s office.
Supporters in the tech sector argue that halting data center construction could hinder job prospects in local areas and potentially benefit global competitors like China in the burgeoning artificial intelligence sector.
Earlier this year, Maine appeared ready to introduce a similar moratorium; however, Democratic Governor Janet Mills vetoed the proposal, citing its potential to obstruct a data center in a town already impacted by the closure of a local mill. Various states have considered such moratoriums, though few have advanced, with some local governments enacting their own temporary restrictions.
The moratorium in New York also holds political weight for Hochul’s reelection bid and the competitive congressional races upcoming this fall. Democrats are focusing on addressing concerns related to high utility bills and affordability issues. Earlier this year, Hochul adjusted her ambitious greenhouse gas reduction targets, attributing the changes to rising consumer energy costs.
In contrast, the Republican candidate for governor, Nassau County Executive Bruce Blakeman, opposes the statewide freeze, arguing that local governments should be empower to negotiate directly with tech companies for data center projects that offer substantial economic advantages.
While New York's legislature passed its own moratorium bill this year, Hochul’s office deemed it overly complex and in need of further refinement. As a result, the governor has chosen to implement an executive order that will take effect as soon as it’s signed.
At present, New York has not emerged as a hub for the largest hyperscale data centers.
