Following the suspension of approvals for large new data centres in New York State, the value of the Bitcoin mining company TerraWulf fell by about 7 per cent that day. The state government will first undertake a uniform assessment of the impact of large data centres on the use of electricity, water and air quality, and the market will then begin to reassess the pace of expansion of the enterprises concerned.
New York has stopped new approvals.
This was the first time that New York State had suspended a state-wide new development approval for a mega-data centre. Under the arrangement, permits that have not yet been finalized will be put on hold pending the preparation of a generic environmental impact statement by the state government.
The assessment will focus on three aspects of impact:
- Large data centre power demand pull
- Pressure on water consumption by the project
- Potential impact on air quality
At the same time, the State Government indicated that it plans to eliminate the sales tax concessions for the large data centre project. Governor Kathy Hocchul argued that the rapid expansion of the data centre could increase the cost of public utilities for the population and increase pressure on natural resources.
TerraWulf emphasizes the existing strengths
TeraWulf currently operates Lake Mariner Park in New York and promotes another facility near Lake Hawkeye. Similar to many Bitcoin mining companies, this company has been shifting its focus from encrypted mining to AI and high performance computing infrastructure in recent years.
According to Paul Prager, the CEO of the company, the new rules may not be all about space. Policy tightening may create a comparative advantage for operators that have completed clearance and have access to electricity, as new projects that are under-prepared are more difficult to move forward.
According to him, Lake Mariner is operational and the required approval process has been completed for the expansion plans involving Fluidstack and Google.
Investors are more concerned about the pace of expansion.
However, investors are clearly more concerned about the uncertainty of subsequent expansion. Lake Hawkeye is still a multi-year project, and TeraWulf is currently evaluating a programme to build its own power capacity on-site to complement subsequent development.
Management believes that this direction is consistent with New York State ' s goal of expanding energy supply while supporting new technological infrastructure. However, in terms of stock prices, the market is more concerned that the approval freeze, tax concessions and environmental reviews may slow the pace of projects.
It also shows a difference of judgement between company management and investors. While the former emphasizes the value of existing assets and licensed reserves, the latter are more concerned with the impact of regulatory changes on the pace of future expansion.