Daijiworld Media Network - New York

New York, Jul 15: New York has become the first US state to impose a one-year moratorium on the construction of large data centres, citing concerns over rising electricity costs, water consumption and the environmental impact of the rapidly expanding artificial intelligence (AI) industry.

Governor Kathy Hochul signed an executive order pausing environmental permits for new data centres with power demands of 50 megawatts or more. During the moratorium, the state's Department of Environmental Conservation will prepare a Generic Environmental Impact Statement to establish consistent standards for future developments. Projects whose permit applications have already been deemed complete will not be affected.

The move comes amid growing public concern that hyperscale data centres, driven by the AI boom, could increase utility bills, strain electricity grids, deplete water resources and adversely affect local communities.

Hochul said the temporary pause would allow the state to develop a regulatory framework that protects residents while ensuring future data centre projects are developed responsibly. She also indicated plans to pursue legislation repealing sales tax exemptions for hyperscale data centres.

New York's decision places it at the forefront of a broader national debate over managing AI infrastructure. Although several US states have introduced measures to regulate large data centres, New York is the first to implement a statewide moratorium. A separate bill regulating data centre development has already been passed by the state legislature and is awaiting the governor's approval.