TeraWulf falls 7% after New York orders one-year pause on new data center permits

TeraWulf shares fell 7% after New York's governor signed an executive order imposing a one-year pause on new large-scale data centers.

On Tuesday, New York Governor Kathy Hochul signed an order temporarily pausing the issuance of State environmental permits for up to one year. During this period, the Department of Public Service will build a regulatory framework, known as the "Generic Environmental Impact Statement," to establish standards for data centers.

The moratorium will be lifted once the state government finalizes the framework, according to a statement from Hochul. The state will assess data centers' potential environmental impacts, including energy demand, water use and quality, and air quality, per the governor's office.

Hochul also said she is pursuing another piece of legislation to repeal sales tax exemptions for large data centers across the state.

Following the governor's announcement, TeraWulf's Nasdaq-listed shares dropped 7.08% to close at $19.41 on Tuesday. 

Plans, operations unaffected

TeraWulf, which has been shifting focus from bitcoin mining to AI and high-performance computing (HPC), currently operates the Lake Mariner campus in New York and is planning and developing another site at Lake Hawkeye.

"Governor Hochul's Executive Order does not change our current expectations for Lake Hawkeye, which is multi-year development. The local planning and review process currently underway remains unaffected," Kerri Langlais, chief strategy officer of TeraWulf, told The Block. "Similarly, Lake Mariner is already operational, and our expansion supporting Fluidstack and Google is fully permitted."

Langlais added that the company appreciates the governor's efforts to establish a clear framework for data centers.

Paul Prager, founder and CEO of TeraWulf, wrote on X that the company is evaluating on-site power for the Lake Hawkeye campus, which "aligns directly with the governor's priorities for new generation."

"As I've said from day one: we like regulation," said Prager. "Today's Executive Order is a positive step."

AI, HPC shift

​​TeraWulf continues to expand its AI and HPC business. Last week, the company signed a 20-year lease agreement with Anthropic at its Justified Data site in Hawesville, Kentucky, which is expected to generate roughly $19 billion in revenue over the term.

In the first quarter, TeraWulf's HPC lease revenue overtook its bitcoin mining business for the first time, reaching $21 million. Total revenue was $34 million for the quarter, roughly flat from $34.4 million a year earlier, while digital asset mining revenue was just under $13 million, according to its Q1 financial results.

Kyle Baird contributed reporting to this story.