New York enacts yearlong pause on all AI data center construction

New York Gov. Kathy Hochul signed an executive order on Tuesday to immediately stop all industrial data center construction across the state. The moratorium came as part of New York’s first-in-the-nation framework to protect local communities from what some characterize as the negative impacts of large-scale data center construction.

Hyperscale data centers use massive amounts of energy and water to operate and cool thousands of computer servers. Data centers can leave nearby communities with higher energy bills, depleted natural resources, and general uncertainty, according to a Tuesday statement from Hochul’s office. New York aimed to lead the way by establishing strong standards that protect the environment and the energy grid, her office explained. Hochul’s order temporarily paused the state's environmental permits for up to one year to give leaders time to establish protective regulations.

What kind of regulations will data centers face? Hochul tasked the state’s environmental service department to conduct a yearlong environmental impact statement assessing how data center construction and operation may impact New York’s energy demand, water usage, and air quality. The report will inform state leaders about possible standards and best practices to enforce against new data centers, according to Hochul’s office. The governor also planned to release a framework to help guide local entities to broker additional benefits, like infrastructure improvements or child care investments, when negotiating data center deals.