New York freezes all large data center permits in US first

New York just did what no other state has managed: it slammed the brakes on big data center construction. Governor Kathy Hochul signed an executive order today temporarily barring permits for any project 50 megawatts or larger, a move that could stall more than a dozen developments while the state figures out its environmental review process. The Department of Environmental Conservation won’t issue any new permits until that’s complete, a process Hochul expects will take about a year.

Hochul didn’t mince words at a Brooklyn press conference. “Progress shouldn’t arrive with a higher utility bill, deleted water supply, or noise pollution,” she said, making clear that local communities will retain zoning control over these projects. Her office is also floating ideas like requiring data centers to pay into a grid-support fund and stripping tax benefits from the hyperscale projects that have drawn the most ire. The order arrives as even stricter bills move through the state legislature, including one that would pause 20-megawatt projects for a year and another pushing for a three-year moratorium.

The public mood has turned sharply against these facilities. A recent Pew Research report found just 10% of Americans are more excited than concerned about AI, and two-thirds worry data centers will spike electricity prices. It’s a stunning reversal from a few years ago when states competed to lure these developments. Now, a survey found people would rather have an Amazon warehouse in their backyard than a data center. The scale alone is staggering — BloombergNEF projects nearly a quarter of new data centers through 2030 will exceed 500 megawatts, driven by AI’s relentless compute appetite.

This sets up an almost certain clash with Washington. Just last month, the Trump-appointed Federal Energy Regulatory Commission told grid operators to create fast lanes for data center interconnections. New York’s moratorium is a direct counterpunch. While Vermont Senator Bernie Sanders has proposed a nationwide pause and Maine’s legislature passed a similar bill before its governor vetoed it, Hochul is the first executive to actually pull the trigger. The question now is whether other states follow, or if New York ends up an outlier watching AI infrastructure dollars flow elsewhere.