Niv Bavarsky
Cold water is being thrown on new data centers in the Empire State, but not for them to slurp up. Yesterday, New York became the first state to temporarily ban approvals for resource-hungry jumbo data centers that AI companies are rushing to build.
Governor Kathy Hochul signed an executive order pausing permits for new data centers that use 50 or more megawatts of power for up to a year. However, projects with prior approval can still proceed.
Hydration break brainstorm
Hochul said the moratorium will give regulators time to study how to ensure that the facilities don’t raise local electricity bills, undermine the water supply, or cause noise pollution. The governor plans to require large data centers to produce their own electricity or pay extra to access New York’s grid. She also wants to have operators invest in grid infrastructure, while removing tax subsidies.Environmental activists and some fellow Democratic politicians cheered the pause.
But local unions said it threatens construction jobs and tax revenues, plus some critics said it gives China an advantage in the AI race.
Meanwhile, Hochul is weighing whether to sign into law a stricter moratorium recently passed by the state legislature.
Beyond New York…lawmakers in several states are pushing for new data center pauses. Meanwhile, the White House opted for a lighter touch, recently getting tech giants to pledge to cover the energy generation for new data centers.
Big picture: Most Americans say they oppose nearby data center construction, and the Financial Times reports that local pushback disrupted $130 billion worth of US projects in Q1 of 2026.