New York is set to become the first US state to introduce a statewide moratorium on the construction of large data centre facilities. This will have far-reaching implications for the rapidly growing data centre industry, especially given the increased electricity demand from the use of artificial intelligence (AI). The decision, announced by an order from Governor Kathy Hochul on Tuesday, marks a precedent for regulating this infrastructure.
The order stipulates a one-year ban on new data centres with a capacity of at least 50 megawatts. The aim of this measure is to allow state regulators to develop new standards for addressing environmental, energy, and water consumption issues. This includes evaluating the long-term impact of data centres on local resources and utilities.
Governor Hochul emphasised that she considers it her responsibility to take action and lead, as the development of data centres has the potential to increase electricity bills, deplete natural resources, and create uncertainty for New Yorkers. This statement underscores the government's concerns regarding the sustainability of the industry's current growth model.
The order follows five weeks after the New York State Legislature passed a bill that also called for a one-year moratorium on data centres to establish stricter safeguards. Maine had also attempted to implement a similar moratorium in the spring, but this bill was vetoed by Governor Janet Mills. This illustrates that data centre regulation is a national issue, handled differently across various states.
