GoKawiilNew York Gov. Kathy Hochul signed an executive order on Tuesday to pause the issuance of new building permits for hyperscale data centers in the state, the first state-level freeze on new construction of AI data centers.
The moratorium could last up to one year with the expectation that the state will use that time to "build a regulatory framework that protects ratepayers, the environment, the energy grid and communities across the state."
"As data center 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," Gov. Hochul said in a press release. "New York will lead the way in creating the strongest standards in the nation for data center development."
Other states may soon follow suit. Lawmakers in 15 states have proposed temporary or permanent halts to data center construction, although several have failed to gain legislative support. In Maine, the legislature passed a moratorium, but was vetoed by Gov. Janet Mills.
The executive order specifically targets hyperscale data centers, which are used for AI training or inference. While traditional data centers might house hundreds of servers, hyperscale data centers can host tens of thousands of servers and are responsible for disproportionate use of local water and electricity resources.
Hochul is directing the New York Department of Public Service to "consider creating a New York Grid Acceleration Fund to require data centers to invest in the state's aging grid infrastructure and energy needs" and is pursuing additional legislation to repeal sales tax exemptions for hyperscale data centers in the state.
A representative of Gov. Hochul's press office didn't immediately respond to a request for comment.
Existing data centers are unaffected
Hochul's one-year moratorium applies to new hyperscale data centers, but construction will continue on AI data centers that were previously issued valid permits. There are also exceptions carved out for certain research and educational facilities that use less power, according to Politico.
There are currently 133 data centers operating in New York, with New York City and Buffalo serving as particularly large hotspots for facility construction.
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