Thailand’s government on Friday asked developers of 49 data centers under construction to halt work and froze approvals for 117 more.The government has given officials a month to draft national rules for the AI sector, which is straining the country’s power and water.Why is Thailand’s government stopping the construction of data centers?Following the first meeting of Thailand’s new government committee on data centers, chaired by Finance Minister Ekniti Nitithanprapas, 49 projects currently under construction were reported by several news outlets as suspended.However, Danucha Pichayanan, secretary-general of the National Economic and Social Development Council, has said that the state has no authority to stop the builds. Developers were simply asked to cooperate and hold off voluntarily until clearer regulations land, which officials expect within a month.Ekniti clarified that the decision to pause doesn’t mean Thailand is “closing the door to data-center investment because the industry is critical to the country’s competitiveness.”Prime Minister Anutin Charnvirakul also said that the goal is to ensure tighter oversight rather than ban the technology. The prime minister said in the same meeting that the rules would be revised to be “airtight” and to put public safety first.Prior to these moves, Thailand’s Board of Investment approved 88 AI and data center projects worth 886 billion baht in the first half of 2026, already past the 623 billion baht logged across all of 2025.The reason for the surge in capital is global operators. Google, for instance, opened a Bangkok cloud region in January that it says will add more than $40 billion to the country over five years. Microsoft committed over $1 billion to Thai cloud and AI infrastructure in March, and in May, the BOI cleared a data infrastructure expansion for TikTok System (Thailand).Danucha says there are 35 data centers already running, 11 of them under BOI oversight, while 166 more sit in the pipeline as either under construction or awaiting sign-off.However, officials have noticed recurring problems because the rapid expansion happened without a single set of rules. Operators have had to seek permits from a scatter of agencies, and some registered as warehouses, which kept the industry’s true scale hidden.What data centers have public anger been directed at?Public frustration is mounting over individual facilities rather than the whole industry. For instance, the energy ministry recently flagged a Bangkok data center for storing 200,000 liters of diesel in underground tanks without permission.Days before that, Bangkok’s Governor, Chadchart Sittipunt, said the capital had received six applications for large standalone facilities since 2021 and 2022, but only three were approved. The other three, including one that proposed building a data center beside a hospital, were sent back for review.The most pressing concern is that large centers draw heavy loads of electricity and consume water for cooling. The government is now considering giving big operators higher power rates. A research group called Data Center Watch counted 75 projects worth about $130 billion that have been blocked or delayed worldwide by local opposition in the first quarter of 2026.How will Thailand’s lawmakers set rules for the industry?The Data Center Business Policy Committee has given agencies a one-month deadline to write minimum rules covering economic returns, environmental limits and site safety. Four subcommittees will handle economics, infrastructure, sites and buildings, and environment.Officials also want a dedicated business category for data centers so that operators can no longer hide under warehousing. They also want a one-stop approval path to replace the current agency-by-agency crawl.For future projects, Ekniti said the plan is a competitive process where investors “pitch” the benefit they would bring Thailand, including how they would improve local income and assist the progress on the country’s net-zero target.Notably, Thailand’s government rolled out a roughly $48 million initiative in August, offering one year of free AI model access to as many as 5 million citizens. The “TH-AI Passport” was designed to boost domestic AI adoption, which still lags behind the global average. The smartest crypto minds already read our newsletter. Want in? Join them.