New York has become the first state to temporarily halt the construction of new large-scale data centers after Governor Kathy Hochul signed an executive order pausing approvals for major projects. The move immediately affects proposed facilities with significant power demands and is intended to give the state time to complete an environmental review before allowing additional development.
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Executive Order Pauses New Large Data Center Permits
Governor Kathy Hochul signed an executive order that temporarily prevents New York from approving new permits for large data center projects.
The order applies to data centers with a capacity of 50 megawatts or more, a threshold that could affect more than a dozen proposed developments across the state. Under the order, the New York State Department of Environmental Conservation will not issue permits for qualifying projects unless the permitting process has already been completed.
The decision makes New York the first state to impose a statewide halt on new data center construction through an executive order.
Growing Concerns Extend Beyond Resource Use
Concerns over the rapid expansion of data centers have been driven by more than just their demand for electricity and other resources. Broader public concerns about artificial intelligence have also contributed to the debate surrounding these projects.
According to a recent Pew Research report, only 10% of Americans said they were more excited than concerned about the growing use of AI in everyday life. The report also found that 23% believed AI would have a positive impact on people's jobs.
Public confidence in AI's broader benefits also remains limited. Less than one-quarter of respondents believed AI would strengthen the economy, while less than one-third expressed confidence that the government would regulate the technology responsibly.
Hochul Says Communities Should Have a Voice
Speaking at a press conference in Brooklyn, Governor Hochul emphasized that economic progress should not come at the expense of local communities.
"Progress shouldn't arrive with a higher utility bill, deleted water supply, or noise pollution," Hochul said.
She also stressed that local governments should continue to have authority over where these facilities are built.
"These data centers can only be built, should only be built in places that want them. So they will never be exempt from local zoning, local approvals."
Environmental Review Will Determine Next Steps
The temporary moratorium will remain in place until New York completes a statewide environmental review process for data centers.
Governor Hochul said she expects the review to take about one year. Once that process is complete, the state plans to reconsider how future projects should be evaluated and approved.
Her office is also considering additional policy changes, including requiring data centers to contribute to a fund that would help support New York's electrical grid. Hochul has also expressed interest in preventing hyperscale data centers from receiving tax benefits.
Legislature Also Considering Stronger Restrictions
The executive order comes as lawmakers in New York continue to debate stricter measures for future data center development.
Last month, the state legislature advanced a bill that would pause construction of data centers larger than 20 megawatts for one year. Another proposal, which remains in committee, would establish a three-year moratorium on qualifying projects.
These legislative efforts reflect growing scrutiny over the environmental and infrastructure impacts of increasingly large computing facilities.
AI Demand Is Driving Larger Data Center Projects
While the average data center built over the past several years has been smaller than 100 megawatts, projects currently under development are expected to become much larger as demand for AI computing continues to increase.
The growing size of these facilities has intensified discussions around electricity demand, environmental oversight, and how states should manage future development.
New York's executive order marks a significant shift in how states may approach the rapid expansion of AI-related infrastructure. By temporarily pausing permits for large data centers while environmental reviews are completed, the state is placing greater emphasis on community input, environmental oversight, and long-term planning.
As the review process moves forward and lawmakers continue considering additional restrictions, the future of large-scale data center development in New York will depend on the policies that emerge from both the executive and legislative processes.
