New York To Become First US State To Impose Ban On New Data Centers

New York: Amid worldwide debate on environmental and human cost of data centers, New York governor Kathy Hochul is expected to sign an executive order imposing the United State's first statewide moratorium on hyperscale data centres.

New York will be the first state to enact a ban, although temporary, construction of any new large data centres for up to a year so the state can create rules to protect the environment and energy grid from the power-hungry facilities that fuel artificial intelligence technology. The ban will go into effect immediately, but will exclude hospitals, universities and other smaller data centers.

Hyperscale data centres, the kind Hochul's order will target are massive facilities housing thousands of servers that demand enormous amounts of electricity and water for cooling. "As data centre 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 in a statement.

Under the order, the state will suspend permitting for new large data centres while regulators work to establish standards covering environmental impact, energy consumption, water usage, and related concerns, according to the governor's office.

Tech bros beg to differ with public opinion

The tech industry and its supporters contend that restricting data centre construction threatens local job creation and risks ceding AI leadership to China.

But the public opinion, regardless of whether they support the Republican party or Democrats, have been growing against data centers. A Gallup survey released in May 2026 shows 71% of Americans are somewhat or strongly opposed to the building of AI data centers in their area, mostly out of concern for their environmental impact and possible job opportunities.

While economic benefits is the most cited reason for supporting data centers, opponents have more varied reasons for their position: air, water, health and use of natural resources. Many also expressed concerns such as possible increase in "utility bills, cost-of-living increases, and the cost of building the data centers (which could involve the use of taxpayer funds)."

The survey also found out that women (55%) are also more likely than men (43%) to register strong opposition to data center construction.

According Forbes' calculation, 5 million gallons is how much water large data centers can consume per day, equivalent to the water use of a town with a population of 10,000 to 50,000.

Political Implications

Most Americans appear to be adopting a “not in my backyard” attitude to building additional data centers, and "the intensity of opposition means that proposed data centers are likely to spur grassroots activism from local residents as well as legal challenges," the survey observes. It also indicates that AI infrastructure could become an important campaign issue in local and state elections this year, and politicians who favor data centers in their area are likely taking a politically risky stance.

Earlier this year, Maine seemed poised to establish a similar moratorium. But the measure was vetoed by the state's Democratic Gov. Janet Mills because it would have blocked a proposed data centre in a town that has struggled following the closure of a local mill. Moratoriums have been proposed in at least a dozen states but have not gotten far, though some counties and municipalities have imposed their own temporary bans.

Other top Democratic Governors, such as California’s Gavin Newsom, Michigan’s Gretchen Whitmer, and Pennsylvania’s Josh Shapiro, have appeared to support data center buildouts in their respective states.

Data center construction is expanding fastest in Texas, Virginia and Georgia, and companies like OpenAI, Oracle, SoftBank, Amazon and Microsoft have huge ones in the works.

The move carries political weight for Hochul as she heads into her reelection campaign and as Democrats navigate closely contested congressional races this fall, with affordability and utility costs emerging as key voter concerns. Hochul had already scaled back the state's emissions-reduction targets earlier this year, pointing to rising energy costs as a factor.

Her Republican challenger, Nassau County Executive Bruce Blakeman, has criticized the statewide approach, arguing that local governments should retain the ability to negotiate directly with tech companies on data centre projects that offer sufficient economic upside.

Although state lawmakers passed their own moratorium bill this year, Hochul's office called the legislation overly complex and in need of refinement. She has instead chosen to act through an executive order, which would take effect as soon as it's signed. So far, New York has not emerged as a major hub for the largest hyperscale data centre projects.