What happens when data center construction is halted? New York legislators have introduced a bill to suspend the construction and operation permits for new data centers for at least three years. New York is at least the sixth state to consider suspending new data center construction.
Arizona, Georgia, Virginia, and other states are pushing for legislation to eliminate tax incentives or prohibit the signing of non-disclosure agreements (NDAs) that conceal details from the public; while in Georgia, Oklahoma, and Vermont, legislators are even proposing, as Sanders suggested, a direct halt to new projects.
Most importantly, Virginia, Georgia, and New York account for more than 30% of U.S. data, with Virginia, in particular, home to the world's largest cluster of data centers. Most of these proposals are expected to be introduced during the 2026 legislative session (most states begin in January), aiming to address the energy, power grid, electricity costs, and environmental pressures brought by AI data centers. Currently, no state has implemented a state-level halt, but there are several local-level (county/city) halts.
Virginia and New York have garnered the most attention due to the large scale of their data centers, but Virginia's HB1515 legislation has been delayed, and New York's S.9144 is just beginning. Bipartisan support exists (Democrats lead NY/VA/GA/VT, Republicans lead MD/OK), but industry resistance is significant, and the future is uncertain. Many states prefer tax reform, rate adjustments, or environmental reviews to a strict halt.
This also illustrates that data center construction is increasingly becoming a pressing public concern in various US states: power shortages, noise pollution, and cooling water demand are also real physical bottlenecks and constraints facing AI development.
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