New York suspends permits for large data centers for up to 1 year

New York has become the first US state to temporarily suspend approvals for sprawling, resource-intensive data centers to support the AI boom.

Yesterday, Governor Kathy Hochul signed an executive order halting permits for new data centers that require 50 megawatts or more of power for up to one year. The pause will give officials time to develop clear rules for future projects and address growing concerns about their impact on communities.

Essential facilities, including hospitals, universities, and smaller data centers, will continue to operate without restrictions.

The move comes as demand for artificial intelligence drives rapid growth in data-center construction across the country. These facilities require massive amounts of electricity and water to run powerful computer servers. 

Many residents have voiced concerns that they could strain local power grids and put extra pressure on natural resources.

According to Hochul, the moratorium will give regulators time to develop safeguards against potential impacts from large data centers, including higher electricity costs and pressure on water supplies. Her proposed approach would require facilities to cover more of their energy costs, support grid expansion, and operate without tax subsidies.

During the pause, New York will study how data centers can support local economies while meeting environmental and energy standards.

Officials say the goal is to encourage responsible AI growth without compromising public interests, energy reliability, or environmental sustainability.

While nature activists are happy with the pause, local unions raised concerns that the policy could cost construction jobs and reduce tax revenue.

Legislators in multiple states are pushing for their own data center moratoriums.