New York becomes first state to impose one-year pause on new AI datacenters

New York became the first US state to enact a moratorium on new datacenters on Tuesday.

Governor Kathy Hochul issued an executive order mandating a one-year statewide pause on the large facilities used to power artificial intelligence products.

“As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” Hochul, a Democrat, said in a statement.

The order will pause the state permitting process for proposed “hyperscale” datacenters, defined as having electrical capacity of more than 50 megawatts, and direct state regulators to create standards focused on environmental impacts, energy demand, water usage and other factors, the governor’s office said.

The appetite for datacenter moratoriums is growing nationally as anger grows over the facilities’ effects on energy prices and local environments. Almost three-quarters of Americans oppose a datacenter project being built near their homes, according to a new Heatmap poll.

More than a dozen states have considered moratoria in response to residents’ fears about the potential costs of living next to datacenters, especially higher utility bills and negative environmental impacts. Maine is the only other state which approved a moratorium through its legislature, but its governor vetoed the measure in April. A small city in southern California became the first municipality to enact a moratorium on construction last month, followed soon after by Seattle, the largest city to do so.

A June poll from the Siena Research Institute found that 46% of New Yorkers felt a one-year moratorium on new permits for large datacenters in the state would be good for New York, and 21% felt it would be bad for New York.

New York’s state legislature had already approved a one-year statewide moratorium bill that also included provisions for an environmental impact report, and new labor, energy efficiency and transparency standards. Hochul has so far not greenlit that legislation, but the state senator who authored that bill, Kristen Gonzalez, welcomed her executive order.

“With this executive order, Governor Hochul is protecting everyday New Yorkers with a first in the nation moratorium on new large data centers. By giving our state time to plan, we can ensure that development and innovation do not come at the expense of all of us.”