In a first-of-its-kind move, New York State Governor Kathy Hochul has declared a state-level moratorium on data center construction. Hochul's decision follows growing concerns about the resource-intensive computing centers that are necessary to power what is being dubbed the next industrial revolution. Most AI data centers are powered by NVIDIA Corporation's GPUs, with the average data center requiring millions of gallons of water daily to perform efficiently.
New York State Data Center Construction To Be Paused In Moratorium Being Signed Tomorrow
In her statement, Governor Hochul outlined that the resource-intensive nature of data centers was at the center of her decision to introduce a moratorium. "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," she said.
Her actions against the computing facilities could extend beyond that as the Governor aims to remove sales tax subsidies for data centers. Additionally, Hochul's action follows after the New York legislature approved a one-year data center construction pause in June.
According to the Governor's office, the one-year moratorium will ensure that a regulatory framework to protect utility customers and the environment is in place.
“New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too,” said the Governor.
Her executive order for the moratorium also follows the trend of growing resistance to data centers across America. On a local level, in states such as North Carolina, counties have paused data center buildouts. Others, such as those in North Carolina and Virginia, have either resorted to lawsuits or defeated proposals to build the computing facilities.
According to data from Data Center Watch, at least 75 data centers that were cumulatively worth $130 billion were blocked or delayed in the first quarter of 2026. This figure was higher than the total figure of 2025. Additionally, 14 states introduced moratorium legislation, with the one in Maine falling short by one vote.
As part of her order, Hochul also directed the Empire State Development (ESD) to run an analysis in order to determine the benefits of data centers and to avoid the negative effects. The ESD will post a Community Investment Framework (CIF), which will coordinate investments by data center operators to "advance the long-term economic vitality and quality of life of the host community."
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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