New York is first US state to suspend permits on new data center construction

New York Governor Kathy Hochul signed an executive order on Tuesday to establish a one-year moratorium on granting permits for new "hyperscale" data center construction. The state cites unprecedented demand for data center development, driven by the needs of artificial intelligence and other digital operations, as a primary reason for the pause. The moratorium aims to address concerns regarding potential increases in electricity bills and depletion of water resources, both significant requirements for operating and cooling large-scale computer servers.

During this one-year period, the state plans to develop a comprehensive regulatory framework to provide clear guidance to local entities. This framework is intended to help local governments attain economic benefits from large-scale data center deals while mitigating adverse environmental and utility impacts. New York's action marks the first such statewide moratorium in the United States, although the National Conference of State Legislatures indicates that 14 other state legislatures are currently considering similar restrictions on data center construction amid widespread opposition to new developments.