New York imposes one-year ban on new large data center projects

New York will halt the issuance of permits for new large-scale data centers for one year, a move designed to allow the state time to establish regulations for the rapidly expanding sector. Governor Kathy Hochul signed the order, citing concerns over the industry's impact on utility bills, natural resources, and job creation.

"New York has always been at the forefront of innovation and change but we've also always guaranteed that New Yorkers benefit," Governor Hochul stated. "As data centre 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. New York will lead the way in creating the strongest standards in the nation for data centre development, ensuring that when companies succeed because of New York, New Yorkers succeed too."

The pause comes as spending on U.S. data center construction has surged in recent years, driven by the growing demand for artificial intelligence. Critics of data centers highlight their substantial electricity and water consumption, which can strain local power grids and increase energy costs. They also point to issues such as noise pollution and the relatively small number of jobs these facilities create compared to their environmental impact.

A June study by Allianz Trade estimated that data centers emitted 286 million tonnes of carbon dioxide in 2025. The report also noted that artificial intelligence already accounts for 15% to 20% of electricity consumption within data centers, a share that could climb to 40% by 2030. A similar measure was previously passed in Maine but was vetoed by the governor.

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New York has always been at the forefront of innovation and change but we've also always guaranteed that New Yorkers benefit. As data centre 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. New York will lead the way in creating the strongest standards in the nation for data centre development, ensuring that when companies succeed because of New York, New Yorkers succeed too.