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New York is set to become the first US state to impose a one-year ban on construction of new data centres, as backlash swells over the infrastructure needed to power the AI boom.
The Empire State will ban data centres of more than 50 megawatts for a period of one year, stopping new permit applications and pausing outstanding ones. A typical large data centre is at least 100MW.
In a video posted to X, Governor Kathy Hochul said that the “scale and speed of development has put unprecedented demand on energy and water resources and threatens to drive up utility costs. Before it goes any further I need safeguards in place to protect New Yorkers.”
Hochul, who is up for re-election as governor in November after serving her first full term, will sign an executive order on the moratorium on Tuesday. The order is a compromise to a more strict bill passed by New York’s state legislature that would have halted development of facilities over 20MW.
There are currently 12 gigawatts of data centre applications pending in the New York grid operator’s queue, according to the New York Independent System Operator. The amount is roughly equivalent to Portugal’s record peak electricity demand.
New York is home to 133 data centres, according to Data Center Map, compared with 637 in Virginia and 504 in Texas. Existing centres would not be affected by the order.
The first-of-its-kind moratorium comes amid a growing backlash over data centres and their potential impact on electricity costs, water supplies and the local communities near which they are built.
Politicians and regulators across the country are grappling with how to manage the industry’s booming growth. According to data from BloombergNEF, US data centre power demand will surge from 34.7 gigawatts in 2024 to 106GW by 2035.
Fourteen states aside from New York are considering banning data centres, including Georgia, Michigan and Pennsylvania.
Legislation that would have imposed a moratorium on Maine was vetoed by outgoing governor Janet Mills.
Virginia, home to the largest concentration of data centres in the world, recently implemented a new tax on the facilities’ energy use.
Numerous local bans by cities and counties have been implemented throughout the US.
On Monday the White House said it would add utility companies and data centre developers to its Ratepayer Protection Pledge, which already includes tech giants such as Amazon, Google, Meta, Microsoft, OpenAI, Oracle and xAI, in which they committed to cover the cost of power infrastructure needed for data centres.
“I never want Americans to pay higher Electricity bills because of Data Centers,” Donald Trump said in January.
A poll conducted by strategy consultancy Public First found Americans were far more likely to oppose the construction of data centres than other nations, with just 26 per cent supporting their development.
In the first quarter of 2026, at least 75 projects worth $130bn were disrupted by local opposition.
Blackstone’s QTS was recently forced to scrap a vast data centre project in Virginia’s Prince William County.
During New York’s year-long ban, state officials will develop measures to protect utility customers and assess how projects affect the environment.
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