New York Data Centre Ban Tests AI Infrastructure Ambitions

The construction of massive data centres has surged to meet the insatiable processing demands of AI firms, but the industry is now hitting physical limits. New York’s executive order marks a turning point, as concerns over electricity and water consumption resonate with farmers and local communities across the US. According to Moody’s, over $700 billion is slated for new data centre investments in 2026, a scale that David Harrison of Rathbone Greenbank suggests will make these facilities a permanent political flashpoint.

While some analysts fear this regulatory friction could impede AI adoption, others see a strategic shift. Euan Ker at Aegon Asset Management notes that over 70 jurisdictions globally are weighing similar restrictions, forcing developers to prioritize energy-efficient strategies to secure approvals. Mark Brennan of Guinness Real Assets Fund argues that the resulting scarcity could actually bolster pricing power for established data centre landlords, potentially cushioning the blow for existing real estate investment trusts.

Despite the friction, the core investment thesis remains intact for many. Katsunori Ogawa of SuMi TRUST anticipates that the bottleneck will accelerate demand for Japanese energy-saving technologies and power semiconductors. Similarly, Mikhail Zverev of the Amati Global Innovation Fund views the current supply chain strain as an opportunity to pivot toward grid infrastructure and high-voltage cable manufacturers like Prysmian, which provide the essential backbone for electrification regardless of short-term construction delays.