Data Center Backlash Surges Past 550 Bans as New York and Texas Push Limits on AI Power Hunger

More than 550 communities across the U.S. have now paused or banned new data center projects. The tally climbed from roughly 300 in late June to over 550 by early August 2026. New York and Texas, once eager hosts for tech investment, joined the fray. Their moves mark a sharp turn in the battle over the explosive growth fueled by artificial intelligence.

New York Gov. Kathy Hochul signed Executive Order No. 62 on July 14. It imposes a one-year moratorium on new hyperscale data centers. The pause hits projects that consume massive amounts of energy and water for thousands of servers. State environmental permits stop while officials craft standards. Hochul said the development “threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers.” She added, “New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too.” (New York Governor’s Office)

The order directs the Department of Public Service to finalize rules so data centers pay more for energy or generate their own. A Generic Environmental Impact Statement will set consistent benchmarks on energy demand, water use, air quality. Officials must also build a Community Investment Framework within 60 days. It covers infrastructure upgrades, child care, prevailing wages and local hiring. Hochul even eyes repealing sales tax exemptions for these facilities. Sen. Kristen Gonzalez backed the step. “Technology should make our lives better, not pollute our water, strain our energy grid, or drive up our utility bills.”

Texas took a different path but reached a similar destination. On Aug. 3, Gov. Greg Abbott directed the Electric Reliability Council of Texas and Public Utility Commission to audit new data center proposals. The review examines grid dependence, water consumption, ownership structures and community effects such as noise and traffic. Until the audit finishes, new grid connections for large projects face a halt. ERCOT’s interconnection queue holds more than 1,800 projects totaling over 474 gigawatts. Ninety percent come from data centers. That figure dwarfs Texas’s record peak demand by a factor of five. Demand could double by 2032. (Ars Technica)

Abbott once branded Texas the “epicenter of AI development.” Now he demands that data centers cover their own infrastructure costs, add grid capacity and never raise residential electric bills. One proposed project near Cedar Creek Lake withdrew after it failed to meet those tests. State tax breaks for the sector exceed $1 billion annually and could cost $3.2 billion in lost revenue. The pause spares behind-the-meter generation such as on-site gas turbines. But it leaves air pollution and greenhouse gas questions largely unaddressed. State Rep. Armando “Manny” Hinojosa called the measure “inadequate political theater” and urged a full ban until stricter laws pass.

The Power Numbers Don’t Lie

U.S. data center electricity use stands poised to jump 50 percent or more. If all projects permitted through 2025 come online, annual consumption could hit between 224 and 359 terawatt-hours. At the midpoint that exceeds the total electricity used by any single state in 2024 except Texas itself. One facility planned by QTS outside Eagle Mountain, Utah, could alone draw 1.9 to 3 terawatt-hours a year once complete. That matches the yearly draw of 227,000 American homes. (Business Insider)

AI already accounts for 10 to 20 percent of data center energy according to Electric Power Research Institute estimates from 2024. The surge shows no sign of slowing. Companies announced plans for nearly 4,000 new U.S. data centers. Only 802 have broken ground. Total planned capacity reaches 565 gigawatts, more than 10 times current levels, yet analysts expect just 180 gigawatts to get built. Sixty percent of capacity slated for 2027 has not started construction. Seven percent already faces delays. A Goldman Sachs analysis cited by CNN paints a picture of materials, power and labor shortages holding back the boom. Spending on the sector jumped 7 percent in June to $68.3 billion, 46 percent higher than the prior year.

Public sentiment has hardened. A Gallup poll found 71 percent of Americans oppose data centers near their homes. “People really don’t like AI data centers,” one industry observer noted. About a dozen states have considered moratoriums. New York and Texas acted. Four others saw bills fail. At the local level resistance runs even hotter. More than 100 counties and cities have approved their own restrictions. Protests flare over rising power costs, water strain, noise from cooling systems and diesel backup generators. In Mount Pleasant, Wisconsin, Microsoft eyes nine buildings that would cover more than 5.2 million square feet on land the size of Central Park.

But. The federal mood clashes with these state actions. President Trump champions rapid AI infrastructure expansion. His administration eyes streamlined permitting and relaxed environmental reviews. In Texas the pace of gas-fired power plant approvals quickened. A developer seeking to power a Meta data center in El Paso filed for a plant large enough to serve 300,000 homes. Regulators approved it in 20 days. Two more projects cleared in three and two days respectively. None received public notice. Each generator emits pollution equivalent to 13 cars. When the El Paso site finishes, 813 such units could run around the clock. Resident Cynthia Crouse lives nearby. “I thought I’d bought my dream home. Then I woke up to the biggest nightmare I’ve ever had.” (The New York Times)

Thirty-nine gas plants have been proposed in Texas alone. They represent nearly half the national total. Trump declared on the campaign trail, “I’m an environmentalist. I want clean air and clean water.” Yet his push for AI dominance now collides with the very pollution spikes those words promised to avoid. Texas environmental regulators signed off on the projects at record speed. The pattern repeats elsewhere.

So the tension grows. Tech giants need unprecedented computing power to train ever-larger models. Utilities face load growth not seen in decades. Communities worry about higher bills, strained resources and lost quality of life. Data center operators point to jobs, tax revenue and the national security case for AI leadership. Yet the numbers show only a fraction of announced projects will actually materialize on schedule. The rest sit in permitting limbo or queue behind grid constraints.

Recent coverage captures the shift. The Information first reported the nationwide ban count topping 500 with New York and Texas now in the mix. San Antonio city council members separately called for their own temporary moratorium on new applications. Virginia, home to the largest existing data center cluster, has debated similar pauses though state bills largely stalled. Ireland and other international markets imposed earlier restrictions that U.S. policymakers now study.

Analysts warn patchwork rules could slow the very infrastructure the industry claims is vital. Others argue the pause buys time for smarter policy. Questions remain on who pays for grid upgrades, how to price the water evaporated for cooling, whether behind-the-meter gas plants simply shift pollution from the utility to the facility. Tax incentives worth billions face fresh scrutiny.

The industry once counted on seamless expansion. Those days have ended. Local officials hear from voters. Governors respond with executive orders. Even deep-red Texas now demands accountability before more megawatts flow. The AI race continues. But the power to run it has become a flashpoint. Communities no longer accept the costs without clear benefits. And the map of where new facilities can rise grows smaller by the month.