Moratoriums on new data center construction could emerge as a new risk factor for contractors and design firms that have grown heavily dependent on a sector growing more closely aligned with enabling deeper penetration of artificial intelligence into the economy.

Driven by growing worries about data centers’ large resource-demand footprint, efforts to put the brakes on especially large projects through legislation, executive orders, zoning changes and organized community pressure look to be spreading, likely scrambling plans and forecasts for developers, operators, engineers and contractors. 

By one estimate the pace and breadth of opposition to data center construction has been accelerating. 

Data Center Watch, one of several groups tracking the phenomenon, says 75 projects were blocked or delayed in the first quarter of 2026, “roughly matching the scale of all of 2025.” Additionally, “more than 300 state data center bills were filed in the first six weeks of 2026 alone,” it says, “with statewide moratorium proposals introduced in 14 states.” Also, by its count, the number of “active opposition groups” has doubled since the end of last year and now spans 49 states.

The numbers, the organization says, point to growing pushback, “extending beyond grassroots groups in communities hosting new developments, drawing in statewide organizations, advocacy groups, and national voices focused on energy, water, land use, and ratepayer impacts.”

That’s translating to uncertainty for contractors, the largest of whom are relying more on data center work; Associated Builders and Contractors says 42% of its members with more than $100 million in annual revenue have contracts for data center work.

A union electrical contractor, Hunt Electric, Eagan, Minn., is involved in building the state’s first hyperscale data center project, but another project it was awarded is now on hold due to opposition, says CEO John Axelson. That experience has the firm more attuned to the risks of datacenter projects.

“Before we invest a bunch of time we’ll have questions about where they’re located and the likelihood of them moving forward,” he says.

One of the more high-profile recent developments in the growing opposition file is the New York governor’s decision to order a halt to some datacenter projects in a state that’s been flooded with datacenter construction interest. Signed July 14, Gov. Kathy Hochul’s executive order requires that until July 2027, proposed “hyperscale” AI-oriented data center projects be denied permits until they pass a comprehensive environmental and economic impact review. The governor’s order short circuits legislation that passed the state legislature in June that called for a more definitive moratorium similar to one called for nationally in a bill introduced in Congress earlier this year.

Such efforts, if broadly successful, carry significant risk to the economy though, according to Associated General Contractors of America. The construction economy has become heavily dependent on data center construction, filling in building gaps that have persisted in other sectors, just as AI is now prime pillar of overall economic growth.

Noting data center construction now underpins industry job and wage growth outpacing that of the broader economy, AGC CEO Jeffery Shoaf says in a recent statement that “the more communities do to restrict construction of data centers, the more likely future construction growth will be dampened or even decline.”

Growing opposition could inflict some real pain on data center development interests, but it’s unlikely to derail the overall movement to ultimately stand up more facilities, an economist tells EC&M. Data centers, says Brian Strawberry, chief economist with FMI Corporation, “are going to get built no matter what,” including moratoriums, which will only “decide where and on what terms” they will be built.

“The pushback has real consequences for individual projects,” Strawberry says, pointing to the New York permitting legislation and Virginia courts voiding re-zonings for a large campus as examples. But a community that says ‘no’ does not reduce demand. It sends the project, the tax base and the infrastructure investment to the next county.”

Permitting is indeed a leading concern for datacenter projects, he says, but it is closely linked to the primary obstacle, which is power availability.

“It is hard to separate from power, because most of the local opposition is about rates and grid strain rather than the building itself,” he says. “A moratorium and a decade-long connection queue look the same to a developer.”

Of near equal importance, he says, labor is the other persistent constraint. Citing a recent AGC survey, workforce shortages are now the leading cause of project delays “and datacenters compete for the same electricians as every other segment.”

But opposition has exerted power as a complicating factor partly because its intensity caught datacenter interests off guard. Legislation was a dominant topic at recent industry events, Strawberry says, coming as the perception issue crystallized. The surprise, “was how fast county zoning fights turned into statewide legislation.”

With opposition firming, datacenter builders will have choices. Some will seek out areas that are more welcoming and less demanding, while others might choose to fight or reach accommodation. A more likely scenario, Strawberry says, is developers slowly adopting a new approach, informed by the opposition, to all projects.

“The lasting shift is in how projects get done. The next generation of data center development brings its own power and negotiates terms up front. Who pays for the infrastructure, what the water and noise commitments are and how the taxes work all get settled before ground breaks. That should make these facilities better neighbors than the last ten years’ worth.”

Until then, and for now, it’s a scrum.

“What this moment really resembles is a Wild West phase right before the rules arrive. Speculators are rushing to get projects contracted ahead of regulation, communities are reacting, and states are sorting into camps. Some are saying no outright. Others, and Texas is the example I watch, are laying out guardrails so communities end up with the right owners. Texas is expected to challenge Northern Virginia as the top market within roughly five years. The states that just say no will keep consuming the compute while the investment lands somewhere else.”