New York Gov. Kathy Hochul has paused new AI data center construction in the state for one year through an executive order, giving regulators time to write standards for hyperscale facilities that have raised concerns about farmland, water, and electricity costs.
The pause is not a ban, Hochul said in an interview with CNN News Central. "So over the course of the year, we'll get it right. We'll tell businesses at the end of the year what exactly they have to do to be able to come to New York and engage in this. It's not a ban, it is simply saying, 'I want to be the first to get it right.'"
Hochul cited anxiety from communities about the footprint of hyperscale data centers, which can span hundreds of football fields. "I would say this is a reaction to the anxiety we're hearing around this, the enormous consumption of space they take up, prime farmland or land that's in Upstate New York that we're trying to preserve."
She also drew a contrast with job creation. Hochul said she wants to make sure the state can supply electricity to companies like Micron, which is creating 50,000 jobs, rather than data centers that create far fewer.
Texas follows with its own audit
Texas Gov. Greg Abbott has ordered an audit of all data centers served by the state's electricity agency, pausing new construction until the audit is complete. Hochul said she has not spoken with Abbott but welcomed the move. "I'm always flattered when other governors follow what we do, especially the State of Texas. They're understanding the same anxiety that we're feeling here in the State of New York."
State and local governments are moving to set rules for AI infrastructure, and AI for Government follows those policy shifts.
The scale of U.S. data centers
The U.S. has nearly 4,000 data centers, about 37% of the world's total, according to the World Resources Institute. A single modern AI data center can use as much electricity as 100,000 homes, and larger facilities now being built are expected to consume up to 20 times that amount. A Lawrence Berkeley National Laboratory study found data centers could account for up to 12% of U.S. electricity consumption by 2028.
Water use is a separate constraint. Mid-sized facilities can use up to 300,000 gallons of water per day to cool servers, while large facilities can consume as much as 5 million gallons per day, roughly what a small town uses. By 2028, AI-related data centers in the U.S. could require up to 32 billion gallons of water annually, enough for about 360,000 households' indoor use, the institute reported.
Why this matters for real estate and construction
The one-year pause in New York changes the timeline for any data center project in the state. Developers who were planning hyperscale campuses now face a permitting process that doesn't exist yet, and the final standards could affect site selection, land acquisition, and utility agreements. For firms working on commercial or industrial projects, the same concerns - farmland preservation, water access, and grid capacity - are likely to shape local approvals elsewhere. AI for Real Estate & Construction tracks how these issues play out in building and development.
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