San Francisco Halts New Data Center Construction With 45-Day Moratorium

San Francisco has imposed a 45-day moratorium on new data center construction as city officials consider tighter rules for facilities that support the rapidly expanding artificial intelligence industry.

The San Francisco Board of Supervisors unanimously approved the temporary restriction on Tuesday, with the measure taking effect immediately. Officials could extend the data center moratorium for roughly two years while the city studies potential permanent regulations.

The decision comes as concerns grow over the environmental impact of data centers, including their significant electricity and water requirements. San Francisco is home to major AI companies such as OpenAI and Anthropic PBC, although the city does not currently have a comprehensive count of all data centers operating within its boundaries.

Supervisor Connie Chan, who is campaigning to succeed Nancy Pelosi in Congress, co-sponsored the ordinance. The measure specifically highlights a proposed data center development in the Bayview-Hunters Point neighborhood, where several similar facilities already operate.

Sponsors of the moratorium said Bayview-Hunters Point has long faced air pollution and environmental justice challenges. Expanding data center development has raised additional questions about electricity demand, utility costs, water consumption and the broader environmental effects on nearby communities.

The temporary ban gives San Francisco officials additional time to assess those issues and determine whether stronger zoning or environmental requirements should apply to future projects. The move also reflects increasing scrutiny of the infrastructure required to power AI services and other computing-intensive technologies.

San Francisco is not alone in reconsidering the rapid expansion of data centers. Other U.S. jurisdictions, including parts of New York state, have also moved to restrict or more closely regulate new developments.

Demand for data center capacity has increased alongside the growth of artificial intelligence, cloud computing and other digital services. However, the facilities’ heavy resource requirements have prompted municipalities to weigh economic and technological benefits against environmental and community concerns.