New York has become the first state to pause development of new hyperscale data centers, with Gov. Kathy Hochul signing an executive order establishing a one-year moratorium on environmental permits for facilities with electrical demands of 50 MW or greater. The pause is intended to give state agencies time to develop a comprehensive regulatory framework addressing the growing impact of AI-driven data centers on the electric grid, natural resources, and local communities, according to the press release.

State officials said the new standards will evaluate issues including grid reliability, electricity costs, water consumption, land use, noise, and environmental impacts before additional large-scale projects move forward. During the moratorium, the New York State Department of Environmental Conservation will develop a standardized environmental review process for future hyperscale facilities. Existing data centers and previously issued permits are not affected.

The action comes as utilities and state regulators across the country grapple with rapidly rising power demand from artificial intelligence infrastructure. New York currently has more than 130 data centers, with dozens of additional large projects proposed or awaiting grid interconnection. State leaders said the temporary pause will help ensure future development aligns with long-term energy reliability and climate goals while protecting ratepayers and host communities.

The executive order has generated mixed reactions. Environmental groups praised the decision as a proactive step toward managing the significant energy and water requirements of hyperscale facilities, while industry organizations warned the moratorium could shift billions of dollars in investment — and the associated construction and electrical work — to other states.