New York governor Kathy Hochul has told AI data centre builders that they can’t make it there after all.
In a first-of-its-kind move, Hochul has declared a state-level moratorium on data centre construction. The pause follows growing concern that the computing sheds needed for the AI boom are guzzling water and power at a daft rate.
Most AI data centres lean on Nvidia GPUs, with the average site needing millions of gallons of water every day to run efficiently.
“As data centre 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,” Hochul said.
The governor’s move pauses data centre construction in New York for one year. Her office said the break should give regulators time to build rules that protect utility customers and the environment.
Hochul is not stopping with the building freeze. She wants to strip away sales tax subsidies for data centres, which have helped make the AI infrastructure land grab even cheaper for deep-pocketed operators.
“New York will lead the way in creating the strongest standards in the nation for data centre development, ensuring that when companies succeed because of New York, New Yorkers succeed too,” the governor said.
The executive order follows a one-year construction pause approved by New York lawmakers in June. It lands as resistance to data centres spreads across the US.
Counties in North Carolina have already paused data centre buildouts. Other local fights in North Carolina and Virginia have produced lawsuits or killed proposals for new computing facilities.
Data Centre Watch said that at least 75 data centres, worth a combined $130 billion, were blocked or delayed in the first quarter of 2026. That was higher than the total for all of 2025, which suggests the backlash is getting some proper legs.
Fourteen states introduced moratorium legislation, with a proposal in Maine falling short by one vote. For once, the AI industry’s favourite answer, “build more,” is running into people with water bills.
Hochul has directed Empire State Development to analyse the benefits of data centres and ways to avoid the downsides. The agency will publish a Community Investment Framework to coordinate operator spending meant to “advance the long-term economic vitality and quality of life of the host community.”
