Key facts
- Texas regulators approved ERCOT's new 'Batch Zero' process for grid capacity allocation.
- The new framework is designed to accelerate the connection of large electricity users, primarily data centers.
- Bitcoin mining companies with facilities in Texas are diversifying into AI and data center operations.
- Cipher Digital, Core Scientific, and Riot Platforms experienced stock price increases following the announcement.
- The Federal Energy Regulatory Commission (FERC) has also taken steps to review data center policies in other regions.
Shares of bitcoin miners with significant Texas operations that are also expanding into AI and data center infrastructure saw gains on Thursday following the Public Utility Commission of Texas's approval of ERCOT's new 'Batch Zero' process for allocating grid capacity to large electricity users.
Cipher Digital (CIFR) reached a new all-time high, rising over 10%, while Core Scientific (CORZ) and Riot Platforms (RIOT) also saw increases of 3% and 2.2%, respectively. The new framework is intended to streamline the grid connection process for large-scale energy consumers, addressing the substantial demand from the AI data center sector, which accounts for roughly 90% of ERCOT's 438,000 megawatts of proposed demand in its connection queue.
This development is particularly beneficial for bitcoin mining companies that have already established power-intensive facilities in Texas and are now pivoting to market these campuses for AI and high-performance computing workloads. Cipher Digital has secured multiple hyperscaler AI agreements, including a $5.5 billion AWS lease. Riot Platforms reported $33 million in data center revenue and expanded its lease with AMD, while Core Scientific generated $78 million in colocation revenue in the first quarter, surpassing its bitcoin mining operations revenue.
Meanwhile, the challenge of meeting power demands for AI infrastructure is a national issue. On the same day, the Federal Energy Regulatory Commission (FERC) directed six regional grid operators outside of Texas to demonstrate that their policies for data center connections do not unfairly burden households and businesses and adequately protect grid reliability. FERC Chair Laura Swett highlighted this as a critical national priority.