New York on Tuesday became the first state to impose a moratorium on the construction of new hyperscale data centers.

“Governor Kathy Hochul today signed an Executive Order to create the nation’s first moratorium on new hyperscale data centers, establishing the strongest standards for data center development and creating a blueprint to support localities. The Governor is temporarily pausing State environmental permits for up to one year in order to build a nation-leading regulatory framework that protects ratepayers, the environment, the energy grid and communities across the state,” Gov. Kathy Hochul’s office announced in a press release.

“New York has always been at the forefront of innovation and change but we’ve also always guaranteed that New Yorkers benefit. 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,” Hochul said.

“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,” she added.

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Hyperscale data centers provide the computing power necessary to process large amounts of data, such as the kind needed to run AI systems. They typically house thousands of computer servers and require tremendous amounts of land, water for cooling, and energy, potentially straining local power grids, while employing few workers long-term, relative to their size.

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Hochul said Tuesday that the hyperscale centers’ strain on resources could become a burden on New Yorkers.

“These hyperscale AI data centers consume enormous amounts of power, truly threatening to outpace our grid’s capacity, and they drive up costs for local ratepayers,” she said.

She added, “I refuse to let those costs be passed on to New Yorkers who already pay too much for their utility bills.”

New York pays the fourth highest amount for energy of all states in the nation, according to Empire Center, a nonprofit think tank focusing on public policy, which also found that in April 2026, New Yorkers paid 56% above the national average on price per kilowatt-hour.

“The bottom line is: Progress shouldn’t arrive with a higher utility bill, depleted water supplies, or noise pollution,” Hochul said.

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The order will take effect immediately. It is not expected to affect the data demands of back-office financial services, hospitals or universities.

The news was met with criticism from tech business groups and several construction unions that had expected to benefit from the building of data centers.

“A shortsighted moratorium only accomplishes one thing: It kills good-paying union jobs,” said Mark McManus, the president of the United Association, which represents plumbers and pipefitters. He added that the governor should instead institute “common-sense guardrails.”

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But the move was celebrated by conservationists and by other Democratic politicians who hailed the governor’s mettle in standing up to Big Tech.

Laura Shindell, the New York State director at the nonprofit Food & Water Watch, called the moratorium “a huge step forward.”

“It comes as the direct result of immense public pressure from people across the state demanding their elected leaders protect them from Big Tech’s assault, which threatens the state’s clean air and water and New Yorkers’ financial security,” she said.

A recent Gallup poll showed that Republicans and Democrats alike oppose data center construction, citing the facilities’ rapacious demand for water and energy at a time when electricity costs are rising.

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