The New York State Legislature has approved a one-year moratorium on the construction of large datacenters, a move aimed at curbing the rapid expansion of facilities powering the artificial intelligence boom. The bill, which targets 'hyperscale' datacenters over 20MW, now awaits the signature of Governor Kathy Hochul.
State Senator Kristen Gonzalez, who co-authored the legislation, said the moratorium is necessary to protect New Yorkers from the environmental and energy impacts of these facilities. 'We should not have to sacrifice our water, our energy, our green space and local communities for big tech and specifically for generative AI,' she said.
The bill would impose a temporary ban on new large datacenters while requiring an environmental impact report documenting water and electricity usage. It also introduces new labour, energy efficiency and transparency standards, and ratepayer protections to keep energy bills low. The original proposal for a three-year pause was reduced to one year as a compromise.
Supporters of the ban point to concerns over the strain on the state's ageing grid, with at least 28 large datacenters currently being evaluated that could add nearly 10,000MW of energy demand. A recent poll found that almost three-quarters of Americans oppose a datacenter project near their homes.
However, the Data Center Coalition, a trade association, warned that the moratorium would 'discourage further investment, undermine New York’s economy, and send a signal that the state is closed for business'. Some lawmakers echoed these concerns, arguing that the ban is a one-size-fits-all measure that could stifle economic growth.
Governor Hochul has previously dismissed a statewide approach to regulating datacenters but has advocated for protecting New Yorkers from additional energy costs. Her office has said she will review the legislation. If signed, New York would become the first US state to enact such a moratorium, following a similar measure in Maine that was vetoed by its governor in April.
