States Impose Data Center Moratoriums as AI Expansion Raises Concerns

Lawmakers seek to pause new data center construction to study environmental and economic impacts

Published on Feb. 26, 2026

Got story updates? Submit your updates here. ›

Several states, including Vermont, Oklahoma, Maryland, Virginia, Georgia, and New York, are proposing data center moratoriums to address concerns over the energy, water, and cost impacts of the rapid proliferation of data centers needed to power advanced AI models. These moratoriums would temporarily pause new data center construction to allow lawmakers time to investigate the effects on local communities and develop appropriate regulations.

Why it matters

Data centers are controversial due to their massive energy and water consumption, which can strain local power grids and drinking water supplies, as well as their impact on electricity rates. A growing number of states are taking action to address these issues, which could slow the expansion of AI infrastructure and raise fears of a potential tech bubble bursting.

The details

The proposed moratoriums would give state agencies and lawmakers time to study the environmental, economic, and community impacts of data centers. Investigations would examine factors like water usage, air quality, property values, and electricity rates. The goal is to develop regulations that balance the needs of the tech industry with the interests of local residents.

  • In late January 2026, Virginia State Delegate Irene Shin introduced a bill to halt new data center permits until July 2028.
  • The Georgia Senate is considering a one-year ban on new data center development starting July 1, 2026.
  • New York lawmakers have proposed a three-year moratorium to allow the state's Department of Environmental Conservation to study data center impacts.

The players

President Donald Trump

Championed rapid data center expansion as part of his AI Action Plan and launched the Stargate project to boost AI infrastructure.

Senator Bernie Sanders

Pushed for a data center moratorium in Vermont, which the state legislature is now considering.

Senator Kendal Sacchieri

Sponsored the Oklahoma bill proposing a data center moratorium until 2029 to allow the Corporation Commission to study their impacts.

Senator Jaha Howard

Introduced the Georgia bill to ban new data center development for one year, citing concerns over rising electricity costs.

Senator Liz Krueger

Co-sponsored the New York bill for a three-year data center moratorium to protect the state's "health, safety and welfare" and address affordability and climate crises.

Got photos? Submit your photos here. ›

What they’re saying

“As data centers continue to grow rapidly across Oklahoma, we are confronting serious unknowns about how these large facilities affect our communities. We must be sincere in addressing these unknowns and finding the best solutions for the erection of these very large facilities. There may be better solutions out there than what we are currently doing — which is allowing data centers to be sited anywhere and everywhere without thinking through the long-term effects.”

— Senator Kendal Sacchieri (Press release)

“We welcome investment from technology companies, but our constituents need peace of mind on the short and long-term impacts of these projects on their communities. Affordability is at the core of the issues we hear from our constituents, and the rapid growth of data centers is increasingly driving up costs for families across the state.”

— Senator Jaha Howard (Press release)

“Massive data centers are gunning for New York, and right now we are completely unprepared. New Yorkers are suffering from an affordability crisis and a climate crisis, and data centers are going to make both of those much harder to deal with. It's time to hit the pause button, give ourselves some breathing room to adopt strong policies on data centers, and avoid getting caught in a bubble that will burst and leave New York utility customers footing a huge bill.”

— Senator Liz Krueger (Press release)

What’s next

If the proposed data center moratoriums are enacted, state agencies and lawmakers will have a set period of time to investigate the impacts of these facilities and develop appropriate regulations before construction can resume.

The takeaway

The growing backlash against data centers highlights the tension between the tech industry's push for rapid AI expansion and local communities' concerns over the environmental and economic costs. These moratoriums signal a shift toward more cautious, deliberative policymaking around emerging technologies like AI.