AI data centers strain Texas grid, squeezing Bitcoin miners and forcing shifts in power strategy
ERCOT’s interconnection queue has surged as hyperscale AI data centers from firms like Google, Microsoft and Amazon drive more than 160–226 GW of new large-load requests. Unlike flexible bitcoin mining loads, AI training and inference need steady 24/7 power, creating transmission bottlenecks because new lines take 5–7 years to build. ERCOT is reviewing thousands of generation proposals (mainly solar and batteries) that do not provide firm baseload, widening a potential reliability and investment gap. Bitcoin miners (e.g., Riot, Marathon, Core Scientific) face more frequent curtailments, higher ancillary-service fees and rising effective power costs in constrained regions such as West Texas. Some miners are adapting by converting sites to hybrid AI/mining facilities, seeking alternative low-cost power (hydro, nuclear, other states), or lobbying for “critical/flexible” load status. With BTC below US$90,000 and margins thin, increased grid congestion threatens miner profitability and may shift hashrate to other regions. Regulators have introduced “special handling” for very large customers and doubled transmission projects under review, but transmission lead times and the predominance of intermittent generation mean short-term operational uncertainty (curtailments, higher fees) and longer-term questions about transmission upgrades, regulatory prioritization, and Texas’s competitiveness as a mining hub.
Bearish
The news is bearish for BTC price pressure on both short and medium terms. Short-term, miners in constrained regions face higher effective power costs, more frequent curtailments and rising ancillary fees—cost increases that compress miner margins and can force shutoffs or sell pressure as operators cover costs or reposition assets. With some operators converting sites to AI use or relocating to regions with cheaper firm power, on-chain mining supply disruptions and potential sell-offs of equipment or BTC holdings could increase volatility. Medium-term, persistent transmission bottlenecks and the mismatch between intermittent new generation and baseload AI demand reduce Texas’s attractiveness as a low-cost mining jurisdiction, likely shifting hashrate to other regions; that transition can temporarily increase network hashrate concentration and operational risk. While long-term impacts depend on transmission upgrades and policy responses, the immediate effect is downward price pressure on miner profitability and potential BTC market volatility driven by operational distress and reallocation—hence a bearish outlook specifically for BTC from this news.