New York has enacted a year-long moratorium on large data center construction, aiming to protect the state’s environment and energy grid from the power-intensive demands of artificial intelligence.
Governor Kathy Hochul signed an executive order Tuesday, establishing the country’s first statewide pause on hyperscale data centers, facilities housing thousands of computer servers and requiring massive energy and water for cooling.
This decision thrusts New York into a national debate over AI industry regulation, balancing environmental and utility cost concerns against fostering local economic growth and the U.S. tech sector.
Speaking in Brooklyn, Hochul said: “The bottom line is that progress shouldn’t arrive with a higher utility bill, deleted water supply or noise pollution, so we have no choice but to address these challenges created by these massive facilities.”
The move comes despite warnings from President Donald Trump, who, echoing tech companies, has cautioned states against imposing AI industry regulations. He argues such measures could impede job creation and allow China to gain an advantage in the rapidly evolving field.
While moratoriums have been proposed in at least a dozen other states, most have failed to advance. Maine, for instance, saw a similar measure vetoed by Democratic Governor Janet Mills, as it would have halted a proposed data center in a town struggling post-mill closure.
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New York’s executive order halts state permitting for new large data centers and mandates regulators to develop standards addressing environmental impacts, energy demand, and water usage. The Data Center Coalition, a trade association, voiced strong opposition. Dan Diorio stated the moratorium “will ensure that those investments, jobs, and economic activity flow elsewhere rather than to New York — with impacts far beyond the data center industry.”
The decision carries significant political weight for Hochul, particularly with her re-election campaign and tight congressional races looming this fall. Democrats are keen to address rising utility bills, an issue Hochul acknowledged this year by softening New York’s ambitious greenhouse gas reduction targets due to increasing energy costs.
Hochul’s Republican gubernatorial challenger, Nassau County Executive Bruce Blakeman, opposes the statewide moratorium. He advocates for local governments to negotiate directly with tech companies for data center projects, provided they offer sufficient economic benefits. In a statement, Blakeman criticized the governor, saying she “doesn’t work with local governments and business leaders to figure out how to get things done,” and promising to “modernize our economy to bring costs down and create good jobs.”
Although the state Legislature had approved its own moratorium bill this year, Hochul’s office deemed the legislation too complex, requiring further refinement. Consequently, the governor opted for an executive order for immediate implementation.
State Senator Kristen Gonzalez, a Democrat and sponsor of the legislative bill, stood alongside Hochul at the signing, asserting, “If Big Tech is coming onto our turf, it should be on our terms.” Despite these developments, New York has not yet emerged as a primary location for the largest hyperscale data centers.
