Oakville has temporarily halted new data-centre development as the town studies how the rapidly expanding asset class should be regulated, a move that could affect plans for a C$3.5-billion AI computing facility.

Town council approved an interim control bylaw Tuesday that freezes new data-centre development for one year while municipal staff examine potential planning rules and impacts associated with the facilities.

The decision comes as HIVE Digital Technologies pursues a major project through its BUZZ High Performance Computing subsidiary in north Oakville.

HIVE announced in May that BUZZ had acquired approximately 25 acres for C$58 million for a planned 320-megawatt AI infrastructure facility in the Greater Toronto Area. The company said the project would represent an investment of approximately C$3.5 billion and is targeted to come online in the second half of 2027.

The site has since been identified as 3480 Ninth Line, near William Halton Parkway and the Mississauga border. HIVE said the facility could accommodate more than 100,000 graphics processing units at full buildout and create more than 800 construction jobs as well as hundreds of permanent positions.

Despite HIVE’s plans, Oakville has said it has not received a formal development application for the project.

Mayor Rob Burton directed staff in July to examine the municipality’s regulatory options as interest in the proposed facility and data-centre development more broadly increased.

The one-year pause gives Oakville time to develop a planning framework before additional proposals can proceed.