New York became the first state to freeze data center construction after Gov. Kathy Hochul signed an executive order today that temporarily blocks the state from approving new permits for large projects.
Hochul’s order applies to data centers of 50 megawatts or more, which could affect more than a dozen projects. The state Department of Environmental Conservation will not issue pending permits.
While resource concerns have fueled the backlash, broader concerns about AI have been a major factor as well. A recent Pew Research report found that only 10% of Americans were more excited than worried about the use of AI in everyday life, and only 23% felt that the technology could have a positive impact on the way people do their jobs. Less than a quarter of the general public felt that AI would improve the economy, and less than a third were confident that the government would regulate the technology responsibly.
“Progress should not come with higher utility bills, water diversion, or noise pollution,” Hochul said at a press conference in Brooklyn. “These data centers can only be built, they must be built only in the areas they want. So they will never be exempted from the zoning, the approval of the area.”
The moratorium will be lifted once the state completes the environmental review process for the data centers, which Hochul expects will take about a year. Hochul’s office is also considering paying data centers into a fund that would support the country’s electric grid, and would like to prevent hyperscale data centers from receiving tax benefits.
Hochul’s executive order comes as tougher measures pass the New York legislature. Last month, the legislature proposed a bill that would freeze the construction of data centers larger than 20 megawatts for one year, while another in committee would freeze it for three years.
The average data center built in the past few years has been smaller than 100 megawatts, but those under development are expected to be much larger as AI drives computing to demand higher. By 2030, nearly a quarter of new data centers will exceed 500 megawatts, according to BloombergNEF, driven by increasing investment in AI.
The idea of setting up a data center has been debated at the state and federal level, but New York is the first to implement it. In December, more than 230 organizations called for a nationwide moratorium on new data centers. Vermont Sen. Bernie Sanders has also proposed a statewide shutdown, though it hasn’t reached much. Recently, the Maine legislature passed a bill that would have halted the construction of new data centers until November 1, 2027, but Gov. Janet Mills vetoed it.
A few years ago, data centers were sought after by states eager to protect new development projects, but recently, public sentiment toward data centers has soured as new projects have grown in size. The rate and speed of construction has begun to strain the power grid in addition to regional utilities such as water and agriculture. Two-thirds of respondents to a recent survey said they were concerned about data centers driving up electricity costs. Another study found that people would rather have an Amazon warehouse in their backyard than a data center.
Hochul’s order may be preparing for a clash with the Trump administration, which has supported data center development. Last month, the Federal Energy Regulatory Commission, led by a Trump appointee, told grid operators to create special express lanes to speed up the connection of data centers.
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