New York announces a moratorium on new AI data centres over 50 megawatts

New York State wants to bring in legislation covering the construction of new data centres.

Why New York has paused large AI data centres

Data centres built for AI are using too much electricity. With data centres springing up across the United States, New York State is looking to regulate the sector. Governor Kathy Hochul has signed a moratorium that halts the construction of new facilities in the state. The pause applies only to infrastructure drawing more than 50 megawatts.

The reasoning is straightforward: energy savings. The state is in the middle of an energy transition, moving away from older fossil-fuel power stations towards cleaner options. New York already has very high electricity demand, and adding more data centres could push the system into shortages, Kathy Hochul warns:

“Faced with the threat that the growth of data centres poses to energy bills, the depletion of our natural resources and the uncertainty weighing on New Yorkers, it is my responsibility to act and to lead by example. New York will lead the way by setting the strictest standards in the country for data centre development, so that companies’ success thanks to New York is also New Yorkers’ success.”

New York wants to reconsider the role of data centres

The rapid spread of data centres is becoming a genuine challenge for many regions. In the United States, Maine also passed a moratorium of this kind, although it was ultimately blocked by a governor’s veto. Connecticut, South Carolina, Wisconsin and Pennsylvania are also examining the issue. Across the country, communities are increasingly questioning whether to host these facilities. They have even been banned in Seattle.

At the same time, data centres still have plenty of supporters. While they are undeniably energy-hungry, they are also seen as an economic boon, drawing in investors and creating jobs.

White House concerns and international pressure on electricity grids

New York’s moratorium should give the local government time to draft legislation that sets energy targets for any new centre. According to The Washington Post, the White House views these kinds of laws very negatively: they would slow the development of American AI and could risk undermining the United States’ leadership in the field.

The United States is not alone in facing the energy challenge posed by data centres. Recently, Denmark decided to hit the brakes hard as well. There, too, the issue is consumption, as the country cannot technically connect new, extremely power-hungry infrastructure to its grid.