Bitcoin News
Risks facing Core Scientific’s 500 MW Texas expansion
The ERCOT interconnection freeze
Governor Greg Abbott issued a directive on August 3, 2026, requiring an audit and verification process for all data centers in the ERCOR interconnection queue. This mandate affects the 474.7 GW of large-load interconnection requests currently under review, which includes 420.8 GW from data center projects. ERCOT postponed the issuance of "large load classifications" originally due on August 7, 2026. These classifications identify projects eligible for "Batch Zero," which handles facilities of 75 MW or greater. Core Scientific needs these approvals to deliver 500 MW of critical IT load to CoreWeave.
The freeze remains open-ended.
The massive queue remains. After the August 3 directive, ERCOT announced it would not meet the August 7 deadline to classify large-load applicants into the Batch Zero queue, which aims to manage the massive backlog of interconnection requests through a coordinated triage process. ERCOT reported that only 18% of submitted dynamic models passed its initial review. This regulatory hurdle adds uncertainty for the 205 GW of projects currently awaiting capacity allocation or category decisions.
Texas also passed a law in 2023 adding registration requirements for certain large crypto-mining operations over 75 MW.
Infrastructure costs and political pressure
Core Scientific must fund all capital investments to modify its infrastructure for high-performance computing. In Denton, the company pays for the construction of two new on-site substations and all electrical interconnection infrastructure. This $6.1 billion real property investment relies on the approval of the Regional Transmission Group and ERCOT. The expansion includes an office complex alongside the high-performance computing infrastructure and expects to complete the final build-out by 2027. The deal includes the lease of 78.85 acres of city-owned land near the Denton Energy Center.
| Metric | Detail |
|---|---|
| CoreWeave Total Capacity | 500 MW |
| Denton Project Investment | $6.1 billion |
| Batch Zero Minimum Load | 75 MW |
| ERCOT Queue Total | 474.7 GW |
| Base-load Tier Capacity | 65 GW |
Will regulators approve the Denton substation modifications?
The company faces mounting pressure from lawmakers. Senator Elizabeth Warren led a probe into whether ERCOT demand response payments to cryptominers constitute unfair subsidies for large consumers. Such scrutiny targets the flexibility that data center operators rely on to manage grid stress. Demand response payments could reach $170 million annually. You should monitor how these political inquiries affect long-term power availability. The project generates $194 million in property tax revenue over ten years and creates 300 full-time, on-site positions.
Technology risks and supply chain shifts
The August 26, 2026, executive order from President Trump restricts the purchase or installation of certain foreign-produced bulk-power system equipment, software, and digital capabilities. This order grants the Department of Energy authority to impose conditions on the continued use of covered equipment where national security or grid reliability concerns exist. Because DOE rules will likely emerge during the life of many projects, this creates significant regulatory uncertainty and adds to development costs.
New litigation creates risk.
The In re Valtrus Innovations Ltd. Patent Litigation case involves cooling technology used in data centers. This case targets both equipment manufacturers and the operators who use the technology. Core Scientific must review vendor contracts to see if it can substitute equipment if intellectual property claims arise. Vendors may use the ability to modify systems or terminate agreements as leverage during renegotiations.
