An aerial view of a 49.5 megawatt three-level data center under construction on July 8, 2026 in Vernon, California. (Getty Images)
New York has become the first U.S. state to halt construction of new large-scale data centers, with the governor signing an executive order pausing permits for up to one year.
The moratorium, which takes effect immediately, applies to facilities with capacities of at least 50 megawatts, enough electricity to power tens of thousands of homes, and will give the state time to develop regulation for the rapidly expanding sector, fired by growing demand for artificial intelligence.
Critics of data centers point to their high electricity consumption, which can strain local grids and inflate energy bills, as well as their heavy water use, noise generation and the relatively small number of jobs they create.
Tech companies and other supporters of data centers argue that blocking construction hurts local job growth and cedes ground to China in the race to dominate AI.
U.S. data center construction spending has surged in recent years, with tech firms pouring tens of billions of dollars into building out infrastructure.
A similar moratorium passed in Maine in April but was vetoed by the state's Democratic governor, Janet Mills, because she said it would have blocked a proposed data center in a town hit by the closure of a local mill.
A June study by Allianz Trade estimated the centers emitted 286 million tonnes of carbon dioxide in 2025.
AI already accounts for between 15 and 20 percent of electricity consumption at data centers, and this share could climb to 40 percent by 2030, the report said.
