New York State Is Pausing New Construction of Data Centers for One Year

In July 2026, New York became the first state in the nation to enact a statewide moratorium on new hyperscale data centers that consume 50 MW or more. Data centers have become daily news items for their cost, environmental impact, resource needs — water and land — and the role they play in "keeping the United States ahead in the AI race."

Those opposing new data centers are concerned about the energy grid and ratepayer costs, resource depletion such as water, and climate impact. While data centers create construction jobs in the near term, they don't create many ongoing operational jobs. Notices from utility companies lean into energy conservation because, in part, infrastructure updates are expensive. According to the WSJ, residential consumers saw their electricity rates rise 32% between 2020 and 2025. Whether accurate or not, consumers feel like they are footing the bill (i.e., subsidizing) for AI development and services.

Consumer distrust is also amplified by stories of city councils signing NDAs and feeling pressure to approve data centers without the benefit of climate and resource studies or the support of their constituents. One article highlighted data centers' pursuit of tribal lands to avoid regulations and scrutiny. Other reports highlight the tax benefits. One community paid out 5-figure bonuses to teachers.

It is fair to say that the pace of buildout exceeds the comfort zone of some local communities. For many, this ship has sailed. The United States has approximately 5,000 data centers — 10x as many as most countries, including Germany, the UK, China, or Canada.