New York Pauses Large Data Center Construction for One Year

New York imposed its first statewide moratorium on large data centers Tuesday when Governor Kathy Hochul signed an executive order pausing construction of facilities larger than 50 megawatts for one year. Hochul described the projects as energy-guzzling.

Morgan Stanley published an analysis the same day stating that community pushback against data center construction has accelerated in 2026 as new moratoriums have been introduced, with most changes occurring at the local level.

The bank said the opposition puts pressure on costs and timelines and could alter the geographic distribution of future facilities. The report noted that pushback can weigh on the timing and intensity of the capex cycle, either extending it or curtailing total investment needs.

Morgan Stanley added that data centers are likely to increase on-site power generation in response to public attention on resource demands.

The bank identified Solaris Energy Infrastructure, Innio NV, and Bloom Energy as potential beneficiaries of greater on-site generation. It said data center real estate investment trusts such as Digital Realty Trust should be shielded from the effects because of their smaller size relative to major hyperscalers.

Morgan Stanley estimated that $156 billion of data center projects were cancelled or delayed in 2025 and another $130 billion in the first quarter of 2026.

It cited a recent Morning Consult survey showing roughly half of respondents believe AI data centers negatively affect electricity prices and the power grid, with about 45 percent expressing similar concerns about water prices and the environment. The analysis stated that sustained pushback could extend the cycle and reduce future supply by lowering capex and financing needs.