New York pauses big data centre permits: what it means for you

New York has hit pause on new large data centres. Governor Kathy Hochul signed an order on 14 July 2026 stopping the state from issuing key environmental permits to any data centre that could draw 50 megawatts or more of electricity, while officials study what these facilities do to the power grid, water supplies and nearby communities.

Hochul signed Executive Order No. 62, which immediately pauses discretionary permits from the state's Department of Environmental Conservation for big data centres, the huge warehouses of computer servers that power AI tools like chatbots and image generators. New York is the first US state to put a statewide pause like this in place, according to Axios.

The pause holds until the state's Department of Public Service finishes a detailed study of how these facilities affect the electricity grid, water use, air quality and the towns that host them. Hochul said that should take about a year, and other reporting says agencies have until July 2027, though the order itself sets no fixed end date.

Alongside the pause, Hochul told state regulators to make data centre operators pay for their own grid upgrades or bring their own power supply, rather than pushing costs onto other electricity customers. She also ordered construction on these projects to use union labour at standard local wages, and asked for a new framework so host communities get some direct benefit from hosting a data centre.

Some projects are exempt: facilities mainly built for manufacturing, medical care, education or specified research, publicly-owned research projects such as the state's Empire AI initiative, applications the DEC had already accepted before 14 July, and permits issued by local governments rather than the state. Sites that sit next to each other count as a single data centre under the rules, according to DLA Piper.

The order points to nearly 12 gigawatts of data centre projects waiting in the queue to connect to New York's grid as of May 2026, with more than 8 gigawatts of that added in 2025 alone.

If you live in New York, the order is aimed at protecting your electricity bills and local water supplies from the strain of new AI infrastructure, and at making data centre developers, not ordinary ratepayers, cover the cost of grid upgrades. Supporters say this shields households from rising costs. Some business and labour leaders warn it could instead push data centre jobs and tax revenue to other states.

For AI companies and the tools you use day to day, the pause does not shut down existing data centres, only new large ones in New York. It adds to a wider pattern across the US where power and water use by AI data centres is becoming a major local political issue.

The state legislature had already passed a separate one-year pause for smaller projects of 20 megawatts or more, called the Responsible Data Center Development Act, on 4 June, but Hochul had not signed that bill. Her executive order runs alongside that unresolved legislation while the Department of Public Service carries out its year-long environmental study.