San Francisco Moves to Pause New Data Centers With 45-Day Moratorium
San Francisco is moving to temporarily block new data centers within its borders, advancing a 45-day interim zoning moratorium aimed at pausing approvals while the city writes updated rules for the AI era.
What happened
The Board of Supervisors' Land Use and Transportation Committee voted 3-0 on October 5 to advance the amended moratorium. The measure now goes to the full Board of Supervisors for final passage.
The urgency ordinance was introduced by Supervisor Shamann Walton with co-sponsors Connie Chan, Jackie Fielder and Chyanne Chen. It would freeze approvals for new data centers citywide for 45 days, and under California's interim zoning statute it could later be extended for up to roughly 22 months.
Why now
Supervisors say the city's data center rules date to 2001, when the planning code classified the facilities as "internet service exchanges," long before generative AI created today's computing demands.
Walton has pointed to the burden on Bayview-Hunters Point, the neighborhood with the city's heaviest concentration of facilities. "We cannot use 2001 rules to regulate 2026 technology," he said.
The pause reflects a wider national backlash. Oakland is considering a moratorium, Richmond recently approved one, and Governor Gavin Newsom has signed bills regulating data centers statewide.
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Options market and stocks to watch
Local moratoriums rarely stop the data center buildout, but a wave of them can raise permitting risk and shift projects to friendlier jurisdictions. Data center REITs and colocation operators with Bay Area exposure are the names to watch, including EQIX and DLR.
The hyperscalers building AI capacity are also worth tracking for any shift in capex commentary. Watch options flow in MSFT, AMZN, and GOOGL as the local backlash story intersects with the AI infrastructure trade.
Utility PCG, which serves most of Northern California, sits at the center of the power-demand debate around new facilities.
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