&imwidth=800&imheight=600&format=webp&quality=medium "New York becomes first US state to halt new AI data centres: Here's why")
New York became the first state in the US on Tuesday (July 14, 2026) to pause the construction of big new data centres. The country has imposed a one-year moratorium after concerns grew over the facilities, prompting a boom in artificial intelligence, which is raising power costs, straining water supplies and burdening local communities.
The development places New York at the forefront of a growing nationwide debate over regulating the infrastructure required to support artificial intelligence. As technology companies accelerate the construction of new data centres, lawmakers and regulators across dozens of US states are considering measures to curb their impact on power grids, electricity costs and local communities.
"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," said Hochul, adding that she will also pursue legislation to reject sales tax exemptions for large data centres.
Development of Generic Environmental Impact Statement (GEIS)
Officials in the governor's office indicated that the moratorium will apply to data centres that use 50 megawatts or more of power. During the suspected period, the state's Department of Environmental Conservation will not issue any discretionary permits for new projects unless applications have already been deemed complete.
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Rather than allowing unrestricted expansion, Hochul instructed state officials to develop a Generic Environmental Impact Statement (GEIS) to establish uniform standards for new data centres and examine the potential environmental effects of the construction and operation of data centres across New York. According to her office, the moratorium will remain in place until the state completes and adopts these standards.
Meanwhile, the New York Legislature passed a bill last month aimed at introducing stricter regulations for data centres, although it is yet to reach Hochul for approval. Officials in the governor's office said the legislation is complex and will require further discussions with lawmakers before it can move forward. The rapid growth of data centres across the United States has significantly increased electricity demand and power costs, prompting mounting concerns and opposition from local communities and policymakers.
