TeraWulf shares drop as New York imposes 1-year data center freeze

New York Governor Kathy Hochul signed an executive order Tuesday imposing a one-year moratorium on environmental permits for hyperscale data centers, sending TeraWulf Inc. shares lower as the first-in-the-nation freeze threatens the Bitcoin miner's expansion plans in the state.

"As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it's my responsibility to take action and lead," Hochul said in a statement. "New York will lead the way in creating the strongest standards in the nation for data center development."

The order halts state-level environmental permits for data centers consuming 50 megawatts or more of power while the Department of Public Service examines grid connection impacts and the Department of Environmental Conservation develops a Generic Environmental Impact Statement. Hochul is also pursuing legislation to repeal sales-tax exemptions for large data centers, which would require legislative approval. The New York state legislature passed its own one-year moratorium last month covering facilities with a peak load above 20 megawatts, though that bill has not yet been sent to the governor for signature.

TeraWulf, which began as a Bitcoin miner before expanding into high-performance computing infrastructure, operates facilities in New York that now face heightened regulatory uncertainty. The company is scheduled to report second-quarter results on Aug. 7, with analysts expecting a nine-cent per-share loss on $47.99 million in revenue, according to consensus estimates. Short interest stood at 24.87% of publicly available shares as of the latest period, with 104.66 million shares sold short and average daily volume of 29.27 million shares.

The moratorium reflects growing bipartisan pushback against data center construction. A March Gallup poll found seven in 10 Americans oppose building AI data centers in their communities. Nearly $130 billion in projects were blocked or delayed globally in the first quarter of 2026, according to Data Center Watch. Florida Governor Ron DeSantis signed a bill in May preserving local authority to reject data center development, while Maine Governor Janet Mills vetoed a similar moratorium in April. At the federal level, Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez have called for a nationwide halt, joined by Representative Frank Pallone Jr., the top Democrat on the House Energy and Commerce Committee.

Bitcoin rebounded 3% to $64,783 on Tuesday, recouping some of Monday's losses tied to heightened US-Iran tensions, but the recovery failed to lift TeraWulf shares as company-specific regulatory concerns dominated trading. The permit pause introduces a concrete timeline risk for TeraWulf's New York operations, with the state's environmental review and potential legislative changes creating an uncertain pathway for future capacity expansion. Empire State Development has 60 days to produce guidance on a proposed Community Investment Framework that could require data center operators to fund grid improvements, energy affordability programs, and local public services.

This article is for informational purposes only and does not constitute investment advice.