A state-ordered audit of Texas data center projects is expected to delay new grid approvals, increasing the value of existing power capacity. Bernstein highlights TeraWulf as better insulated due to its diversified power assets, while other Bitcoin miners with significant Texas expansion plans face potential delays.
Texas Governor Greg Abbott's directive to audit data center projects and ERCOT's subsequent pause on 'Batch Zero' reviews creates uncertainty for new grid interconnections. This development is significant because it could delay expansion plans for Bitcoin miners and AI infrastructure operators heavily reliant on new Texas grid approvals. Companies like Cipher Mining, CleanSpark, and Core Scientific are identified as having high exposure, potentially facing setbacks. Conversely, TeraWulf is seen as better insulated due to its diversified power assets outside of Texas, and Riot Platforms and IREN Ltd. benefit from already having substantial approved capacity, increasing the scarcity value of their existing operations. This creates a short-term opportunity for WULF, RIOT, and IREN, while posing a risk for CIFR, CLSK, and CORZ.