Galaxy CEO Michael Novogratz on data center expansion, fate of Senate crypto bill

Yeah, listen. In 2022, we bought a Bitcoin mining facility because we wanted to plug our Bitcoin miners in. Two years later, when everyone started playing with ChatGPT, we looked into it. The idea that AI compute would need so much power, and a lot of Bitcoin miners had big swaths of energy. We were one of them. At that point, we had 800 megawatts approved. You apply to the Texas grid, managed by a group called ERCOT. Texas has its own grid, separate from the other 49 states. Texas, where we are in Dickens County, has a tremendous amount of power. Energy was cheap because they built tons of wind, solar, and natural gas. There's a process to apply for more power from the grid. It's lengthy because they have to ensure the grid has enough electricity without driving prices crazy. This is a big deal in the US right now—people don't want consumer prices driven up by AI data centers. We went through that process, which took over a year. The people in Texas are working hard because everyone wants energy. They check if you can actually build what you say, if you have the capital, and if granting that power will impact the grid. We got all that approved, so now we have another 830 megawatts. There's a lineup of people wanting power.

That's not the case in Texas. When it was a Bitcoin mine, we could shut the miners down. You can't do that with AI, but you build a tremendous amount of backup power—diesel generators or battery power—so you can run the data center without the grid for short periods. All of this is new, and the rules are being made as we go. One frustrating thing for data center people in Texas is that ERCOT really slowed the process to answer all these questions. This will be political all over the country. I think Texas is taking a smart approach by being cautious. We feel blessed to have gotten through the process.