New York Enacts Nation's First Statewide Pause on Data Center Construction

New York is enacting a one-year moratorium on building any new large data centers, as the state looks to reevaluate the environmental and energy implications of the facilities.

According to the Associated Press, New York Governor Kathy Hochul signed an executive order on July 14 to temporarily ban new permits for so-called hyperscale data centers, which can house 5,000 or more servers and span up to a million square feet. This marks the country's first ever statewide data center moratorium, and comes in the face of frequent warnings from President Donald Trump against regulating the artificial intelligence industry.

"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,” Governor Hochul said. “New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too.”

Hochul noted that New York has seen an unprecedented period of growth in demand for data center development. Over the course of the year-long pause on all state-level environmental permits for large data centers, the state will look to develop a stronger regulatory framework to protect communities and power grids.

The rapid growth of AI data centers saw U.S. electricity prices climb by nearly 7% year-over-year in 2025, while the U.S. Department of Energy projects that data centers will consume up to 12% of the country's electricity by 2028. Over the next decade, data centers will also account for 40% of electrical demand growth, according to a Goldman Sachs report. And in a 2025 analysis, Bloomberg estimated that the cost of electricity for a single month in areas near data centers has exploded by as much as 267% over the last five years.

Maine nearly enacted its own moratorium on data center construction earlier in 2026, before Governor Janet Mills vetoed the legislation over concerns that it would stall a proposed facility in a struggling town that had recently closed a mill. Seattle's City Council unanimously adopted a year-long citywide freeze on new data center siting in June, to allow for more time to analyze how "high-density computing facilities" impact Seattle's power grid, water usage, utility rates and public health.