New York has become the first state in the nation to temporarily halt the development of new hyperscale data centers while officials develop new statewide standards for the rapidly expanding industry.
Governor Kathy Hochul signed an executive order Tuesday placing a moratorium of up to one year on environmental permits for new hyperscale data centers. The pause is intended to give the state time to establish regulations addressing energy use, environmental impacts, and community concerns.
Hochul said the state has seen a surge in proposals for large-scale data centers that could place significant demands on New York’s power grid and water resources.
“We want the strongest standards for data center development,” Hochul said, adding the state will develop protections for communities, reduce pressure on the electric grid, minimize land and noise impacts, and safeguard natural resources, including water supplies.
The governor also said future data center developers will be expected to supply their own power or pay higher costs for electricity rather than placing additional burdens on existing ratepayers.
“Our current energy needs and our future energy needs require far more power than we’re producing even now,” Hochul said.
Environmental advocates applauded the move.
Liz Moran, New York policy advocate for Earthjustice, called the executive order “decisive action,” saying communities nationwide are seeing AI-driven data centers increase pollution, strain electric grids, and drive up utility bills. Moran said the pause should ensure future facilities cover their own energy costs rather than shifting expenses to consumers.
Construction industry leaders, however, criticized the decision.
Associated General Contractors of New York State President and CEO Mike Elmendorf said the moratorium could permanently drive projects to other states actively recruiting data center investment, including Virginia, Texas, and Georgia.
“A moratorium is a moratorium, whether it arrives by legislation or executive order,” Elmendorf said. “Halting permits for as much as a year in this fast-moving sector will not simply delay projects—it will send them permanently” to competing states.
Elmendorf also said the order affects projects that have already invested tens of millions of dollars while awaiting final approvals and argued New York already has one of the nation’s most rigorous environmental review processes.
He said the association supports developing appropriate environmental standards but believes that work should occur alongside permitting rather than through what he called “a de facto ban.”
The executive order follows calls from environmental groups and lawmakers for increased oversight of large data centers as artificial intelligence drives demand for new computing infrastructure.
