On July 14, New York Governor Kathy Hochul signed an executive order to create a statewide moratorium on new hyperscale data centers.
The governor’s office says this moratorium is the nation’s first and will “establish the strongest standards for data center development.”
Hyperscale data centers are massive buildings that run large numbers of computers 24/7. Inside are servers, storage, networking gear, and heavy-duty cooling and backup power to keep the computers running non-stop. The campuses are typically run by a handful of major tech companies, and are designed to deliver cloud storage and artificial intelligence processing at massive scale. A single site can cover millions of square feet.
And they’re sweeping the country.
A large data center in Council Bluffs, Iowa. Chad Davis/Wikimedia Commons (CC BY 2.0)
As of June 2026, the United States is home to 4,423 data centers, the most of any country worldwide. The runner-up is the United Kingdom, which has 555 data centers. It’s unclear how many of these locations are considered “hyperscale data centers,” but the scale of data center growth in the U.S. is significant by comparison.
Critics of these developments have recently gained momentum, calling on local governments to enact bans or moratoriums on new data centers, citing environmental, health, and energy cost concerns.
With Hochul’s new executive order, New York seems to be answering the call — even if only temporarily.
To impose the moratorium, Hochul will be temporarily pausing state environmental permits for up to one year. The goal in this time, her office reports, is to build a regulatory framework designed to “protect ratepayers, the environment, the energy grid, and communities across the state.”
“New York has always been at the forefront of innovation and change, but we’ve also always guaranteed that New Yorkers benefit,” Hochul said in a press release.
“As data center 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.”
Earlier this year, Hochul worked with the state’s Department of Public Service to implement a proceeding called Energize NY, which requires data centers to either pay more for their energy or supply their own, thereby keeping energy rates affordable for New Yorkers.
“Unlike other sectors, data centers consume massive amounts of finite resources and place an unprecedented strain on the electric grid without creating many jobs in the process,” a press release from February 2026 explained.
“Governor Hochul is taking action to ensure every day New Yorkers do not subsidize this energy-intensive industry.”
As part of Energize NY, Hochul has directed DPS to develop a Generic Environmental Impact Statement for data centers to ensure any that emerge in New York in the future are held to consistent environmental standards. This standardization will take place during the one-year moratorium.
“The state will use the GEIS to assess the potential environmental impacts of the construction and operation of data centers in the state, including their effect on energy demand, water use and quality, and air quality,” a July 14 press release explained.
“Once the State finalizes these standards, the moratorium will be lifted, allowing new data center projects to proceed as long as they follow state, zoning code, and other local approvals.”
New York Governor Kathy Hochul. Courtesy of the Office of Governor Kathy Hochul
Another piece of this new executive order includes the development of a Community Investment Framework, which will provide guidance to local entities to help them negotiate community benefits as part of any data center development, including local infrastructure improvements, childcare investments, and direct financial support to communities.
The governor’s office said this framework will also establish wage and labor standards for data center workforce developments.
Additionally, Hochul urged the state to create a New York Grid Acceleration Fund, which will require data centers to invest in the state’s aging grid infrastructure and energy needs. The DPS will also consider approaches requiring data centers to fund new clean energy generation.
Lastly, the governor shared that she is pursuing legislation to repeal sales tax exemptions for massive data centers across the state.
Hochul has been an early advocate for artificial intelligence regulation, introducing an initiative to advance AI research for public good, advising on policy to protect jobs amid AI development, data protection safeguards for children, and protections against unauthorized uses and dissemination of deceptive AI images.
She has also created an Office of Digital Innovation, Governance, Integrity, and Trust to help improve digital safety and technological governance.
While other states have considered moratoriums on AI data centers — currently, 19 of 50 states restrict data centers or are considering restrictions — New York is the first in the nation to establish a statewide moratorium.
Maine came close to a statewide moratorium earlier this year when lawmakers passed a bill that would impose a temporary ban, but Governor Janet Mills later vetoed it, saying she would only support the legislation if it included an exemption for a data center that was already under contract.
Now, New York takes the lead.
“New York will lead the way in creating the strongest standards in the nation for data center development,” Hochul said in a press release, “ensuring that when companies succeed because of New York, New Yorkers succeed too.”
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Featured Image: Tony Webster/Wikimedia Commons (CC BY 2.0)
