Is it time to stop building data centres?

Are we building too many data centres, too quickly? New York thinks so – and it’s pausing new approvals for a year.

The ban applies to those that use 50MW or more and doesn’t apply to projects already in the works. The pause will last for a year – softened from the original three – to give the state government time to develop a new framework for approvals, including environmental impact considerations around water use and energy demand. Alongside that will come efforts to repeal the existing sales tax on large data centres.

“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,” said Governor Kathy Hochul in a statement.

She added: “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 move comes as the rapid rollout of data centres is increasingly the focus of protests and legal challenges alike – no surprise given horrifying reports of local pollution and wider concerns about water and energy use driving shortages and higher costs.

What does it mean for industry?

Digital Realty told Reuters it would move investment outside New York state, saying “a one-year pause isn’t the right approach”. But NTT Global Data Centers’ CEO Doug Adams said the industry needed to do better explaining the impact and benefits of such infrastructure, saying: “We welcome the conversation.”

Now, it’s worth noting that no data centre going in for approval now was going to get online quickly anyway. The Executive Order from Hochul states that there’s currently 12GW of data centre load requests in the interconnection queue, eight of which joined the line up last year alone. Sorting that out could have more of an impact on data centre build times than a year-long planning pause.

That said, Morgan Stanley analysts noted that political opposition could become as much of a bottleneck as grid connections and building shortages.

“Community pushback against data centre construction has accelerated in 2026 as new moratoriums have been introduced, with the majority of the change happening at the local level,” the analysts wrote in a note, seen by Business Insider. “This puts pressure on costs and timelines and could alter the geographic distribution of data centres.”

Not alone in slowing data centres

New York may be the first US state to roll out a moratorium, but it’s not the first one to try. Maine failed to get it through and more are on the books. On the flip side, the UK has loosened planning rules and given data centres grid priority.

Scotland is considering such a moratorium, which would apply to all projects not yet with planning permission, amid concerns that the current rate of data centre development was “intrusive and not keeping with the local environment,” according to one local councillor.

Amsterdam last year banned new projects in the city until 2030, and Dublin has recently re-allowed new connections after a grid-focused pause, assuming the data centre supplies its own power.

Monterey Park in California has also voted to ban data centres – permanently – with temporary pauses in Seattle, Spokane and elsewhere.

Such efforts are being tracked here, and they suggest that there are twice as many states in the US with active bans, legislation in the works, or discussions to do so than there are states with no action against data centres or favourable incentives. That shows public – or at least political – enthusiasm for these massive data centres is waning, so expect more moratoriums to follow New York’s.

More articles by Nicole Kobie

• Heat waves are making work impossible, but what can you do about it?
• Data centres are making heatwaves hotter
• Remote work is bad for us – but that’s because we’re doing it wrong