New York has become the first US state to impose a statewide moratorium on large new data centers, an early regulatory test for Bitcoin miners that are restructuring their businesses around artificial intelligence.
On July 14, Gov. Cathy Hochul signed an executive order directing state regulators to suspend incomplete permit applications for new or expanded data centers that consume at least 50 megawatts of electricity. The moratorium will continue while authorities assess the project’s impacts on power demand, water supply, air quality, noise and surrounding communities.
If your application is declared complete, you can proceed with your order, but local permits will remain outside of its scope. Therefore, this action would halt not all data center projects planned or under construction in New York, but some of the development pipeline.
New York’s new measures follow the regulatory model the state previously applied to Bitcoin mining. In 2022, the state imposed a two-year moratorium on certain air permits for fossil fuel power plants that directly power proof-of-work mining operations while the agency conducts an environmental review.
The latest order expands the country’s oversight from a narrow group of cryptocurrency facilities to large-scale computing projects that serve AI, cloud services, and other digital businesses.
Although the current mandate does not include Bitcoin mining, the facilities it covers look a lot like the infrastructure that a growing number of miners want to operate.
Over the past year, public BTC mining companies have been converting sites built around large power grids, substations, and industrial sites into campuses that can host graphics processors used for AI.
New York State’s actions therefore pose a potential hurdle for an industry seeking to reduce the exposure of Bitcoin prices and crypto production to adverse economic conditions.
BTC miners are linking the next growth cycle to AI
Bitcoin miners have poured billions of dollars into AI infrastructure in search of more predictable returns from power-rich sites originally built to produce the best cryptocurrencies.
The publicly traded miner announced it has signed more than $70 billion in deals to host AI and high-performance computing workloads. Matthew Kimmell, investment strategist at CoinShares Valkyrie, estimates that AI could generate about 80% of revenue for public miners by the end of 2026.
This opportunity is being driven by an unprecedented expansion in technology spending. Goldman Sachs predicts that annual AI capital spending could reach $765 billion in 2026 and rise to $1.6 trillion by 2031 as companies invest in data centers, chips, power generation, transmission infrastructure, and cooling systems.
Bitcoin miners are in a position to provide some of the most constrained parts of its construction. Many of these companies already control industrial land, large power allocations, energized substations and grid connections that could take years for new developers to secure. I also have experience running power-intensive computing facilities around the clock.
Keel Infrastructure, formerly known as BitFarms, revealed the scale of its transition this week after the city of Sherbrooke, Quebec, granted conditional approval to the sale of land related to the company’s proposed C$1.8 billion high-performance computing campus.
Keel plans to consolidate 96 megawatts of power currently distributed across three Bitcoin mining facilities into one AI data center site. The company has identified high-performance computing as its main growth business, and plans to keep its remaining Bitcoin mines open as long as they remain profitable or until the sites are needed for redevelopment.
Migration involves more than simply replacing one type of computer with another. Specialized machines used to mine Bitcoin typically cannot handle AI workloads, requiring operators to deploy advanced graphics processors, networking equipment, backup power systems, and more advanced cooling infrastructure.
Miners accept these costs because AI contracts can last for 10 years or more and provide revenue visibility that Bitcoin mining cannot provide. Mining income fluctuates depending on cryptocurrency prices, network competition, and periodic decreases in block rewards.
These pressures have intensified over the past year, as CoinShares estimates that the average cash cost of producing one Bitcoin among publicly traded miners will rise to about $79,995 in the fourth quarter of 2025, while the revenue earned from each unit of computing power has fallen to near multi-year lows.
Therefore, AI provides miners with a way to convert power capacity into contracted infrastructure revenue.
Data center backlash spreads beyond New York
Meanwhile, the revenue opportunities drawing Bitcoin miners to AI face growing political opposition as lawmakers grapple with the electricity, water and infrastructure demands of large data centers.
A Gallup poll conducted in March found that 71% of U.S. adults opposed building local AI data centers, with 48% strongly opposed. Approximately 70% said they were concerned about the facility’s impact on the environment.
The most common cause of opposition was resource consumption. Half of the respondents who opposed community development cited excessive use of electricity, water and other resources, while others expressed concerns about pollution, rising utility costs, transportation and the impact of large campuses on surrounding communities. Proponents most cited potential jobs, tax revenue and broader economic benefits.
The concerns of the people are beginning to shape the law.
As of July 1, lawmakers in 15 states were considering data center moratoriums, with proposals still under consideration in Delaware, Georgia, Michigan, Pennsylvania, South Carolina and Vermont, according to the National Conference of State Legislatures.
The Pennsylvania Legislature proposed a three-year moratorium with a study of the industry’s economic and environmental impacts. South Carolina’s bill would suspend local approvals until lawmakers establish a statewide oversight framework, while Vermont lawmakers have proposed restricting new development until 2030.
The move reached the U.S. Congress, where Sen. Bernie Sanders of Vermont and Rep. Alexandria Ocasio-Cortez of New York announced the Artificial Intelligence Data Center Moratorium Act in March.
The proposal would halt construction and expansion of AI data centers until the federal government adopts safeguards for utility customers, workers, civil rights, and the environment.
Still, most state efforts have yet to produce binding limits. Maine’s governor had 18 months to veto the bill, but proposals were defeated in Minnesota, New Hampshire, Oklahoma and South Dakota.
These results indicate that protests spread faster than statewide restrictions.
New York has broken that pattern. The measure would provide other local lawmakers with a practical model for restricting development while regulators examine electricity costs, water consumption and local infrastructure needs.
Expanding moratorium could increase costs of AI pivots for BTC miners
If other states follow New York’s lead, Bitcoin miners could feel the economic impact before regulators permanently reject a single data center project.
Permit suspensions can delay construction milestones, customer payments, and removal of unprofitable mining equipment. Financing costs may also increase as operators continue to repay debt raised for AI projects that have not yet generated revenue.
The scale of investment required limits the scope for prolonged disruption. CoinShares estimates that Bitcoin mining infrastructure typically costs around $700,000 to $1 million per megawatt, while AI facilities cost around $8 million to $15 million per megawatt.
This difference reflects the advanced cooling, networking, backup generation, and reliability standards demanded by AI customers. Bitcoin mines may scale back operations if power prices rise or the grid becomes strained, but AI tenants typically require near-continuous power and tighter service guarantees.
Miners that are unable to complete the conversion on time may remain dependent on Bitcoin production for longer than planned. Their profits will continue to fluctuate based on cryptocurrency prices, transaction fees, and network competition, while their capital will remain tied up in unfinished AI projects.
Wider restrictions could narrow the number of jurisdictions available for development. Fewer viable sites could strengthen the bargaining position of power companies and local governments, requiring them to make larger contributions to grid upgrades, taxes and community benefits.
New York’s order provides an early indication of how these additional costs could be imposed.
Hochul directed regulators to consider creating a grid acceleration fund funded by upfront payments from data center developers. The funding could support transmission upgrades, clean power generation, battery storage, and protections for projects that fall short of the proposed scale.
The order also calls for a beneficiary-pay system that would shift the cost of grids and infrastructure to the large customers who build them. Regulators may establish separate power service classifications and require data centers to fund dedicated generation or storage capacity.
These measures could increase the amount miners have to invest before an AI facility starts generating revenue. While existing access to land, substations, and power remains valuable, controlling grid connections may no longer protect developers from the extensive costs of serving large campuses.
Companies with geographically diverse portfolios may direct capital to regions that offer faster approvals and access to greater power, but a growing patchwork of state regulations will make that flexibility more expensive.
As a result, BTC miners may face longer development schedules, increased infrastructure contributions, and a smaller pool of locations that can support large-scale AI campuses.
