New York state is increasingly likely to become the first state to temporarily halt large data centre development.

On June 7 local time, IT outlet TechRadar reported that the New York state legislature passed a bill to delay development for 1 year for data centres with maximum demand of 20 megawatts or more.

The measure is not yet final. The bill will take effect only if Governor Kathy Hochul signs it. Hochul has not said whether she will approve it, and the decision deadline runs until December.

The step is closer to a temporary pause than a permanent ban. It also applies only to large facilities rather than all data centres. Even so, it is being seen as one of the biggest legal moves at the state level to put the brakes on new data centre construction.

The New York state legislature pursued the moratorium to secure time to review the impact of data centres on the power grid and the environment. The state’s environmental agency will be tasked with writing a report summarising what burden data centres place on demand for electricity, water and land.

State Senator Christine Gonzalez (크리스틴 곤잘레스) said the step is "one of the first cases where the legislature really draws a line." She added that it is the legislature’s responsibility to ensure New York residents hold the initiative, and pointed to big tech having "made its own rules or moved without rules" so far.

Concerns in politics and local communities have recently grown. In a recent survey, 71 percent of Americans said they do not want a data centre built in the area where they live. The biggest reasons cited were water and electricity use. That is also why some assessments say data centres now rank below nuclear power plants in local site preference.

AI is at the centre of the conflict. As demand for large-scale computing has surged, the need to expand data centres has also increased. AI companies have said they will run data centres in a more environmentally friendly way in the near term, but many projects now in the planning stage have not reached that level.

There is also opposition to the moratorium. Some politicians and industry figures argue data centre development is essential to economic growth and technological advancement. They also acknowledge that concerns about energy use and environmental impact must be addressed.

As a result, the issue has moved beyond a simple dispute over whether to proceed with development. New York state is on a test bed over what standards it will set between expanding AI infrastructure and burdens on power and the environment. Whether the governor signs the bill and what the future environmental report contains could also affect debates over data centre regulation in other regions.