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January was a big month for Indiana economic development wins with both Google and Meta selecting our state to build a pair of $800 million data centers.
Public opinion on Facebook’s privacy settings or Google’s AI efforts might be mixed, but states have good reason to be fiercely competitive in winning their data center business. These projects employ hundreds of local contractors, create dozens of high-salaried jobs and help attract other high-tech businesses by investing in upgraded electrical and telecom infrastructure.
The question is: How many more projects like these exist, and how do we best position Indiana to win as many of them as possible?
The good news is that Indiana is well-positioned to attract these projects moving forward. We have a good business climate, reliable power and a data center incentive through the Indiana Economic Development Corp. to stay competitive with neighboring states.
The bad news is that we are playing catch-up to our neighbors, who have attracted many of the largest projects over the past decade. Amazon, for example, has committed to spend an additional $7.8 billion to expand its existing $6 billion, seven-data-center footprint in Ohio. This is in addition to Intel selecting Ohio for its $20 billion chip manufacturing plant and both Google and Meta having existing facilities in the state.
Indiana can, and should, continue to work hard to win these projects, but is there a way for us to work smarter and become a market leader?
Enter Bitcoin mining. I know, I know—I can see your eyes roll as I write this. You’re not alone—many states view Bitcoin mining as a speculative business in a small market, which is exactly why an opportunity exists for Indiana.
As of this writing, there are 25 publicly traded companies in this emerging market segment. Four of which—Marathon, CleanSpark, Riot and Cipher—boast multibillion-dollar market values. These companies build the “picks and shovels” for the Bitcoin network, so, whether or not you view Bitcoin as a speculative asset (I don’t), the miners should be viewed through a similar lens as the soon-to-be-built Meta data center relative to opinions of Facebook as a social media network.
In both instances, hundreds of millions of dollars are being invested in electrical infrastructure improvements, employing hundreds of contractors and creating dozens of high-salaried jobs. The main difference being that Indiana has the potential to attract the world’s largest Bitcoin mining projects instead of battling over Meta’s 18th U.S. data center.
Traditional data centers and Bitcoin mines share the same basic tenants: They’re facilities that give a home to servers, provide them with electricity and keep them cool. The main difference is, Bitcoin mining servers don’t store any data on them. This small but important difference allows Bitcoin miners to do something data centers can’t: Turn off at a moment’s notice.
Why is this important? Well, remember that snowstorm back in January? If you’re like me, you probably cranked your heat up to battle the subzero temps. When we all do this at once, the energy grid we share can get overloaded, potentially resulting in blackouts.
Short of building new power plants overnight, there are two ways to alleviate this stress: 1) Charge people more money to keep their lights on, or 2) Get energy-intensive businesses to power down.
Now imagine if Facebook or Netflix went offline while everyone was cooped up inside during January’s blizzard. There would be riots in the streets, so data centers need to stay online. Bitcoin miners, however, are a flexible energy consumer. They stay online when there is an abundant amount of energy and can turn off within seconds when the power grid shows signs of stress.
This flexibility to release energy in times of stress helps keep residential energy bills stable, and more important, the lights on.
So what does Indiana need to do to attract these “data centers without data” to the Hoosier state?
We already have key pieces of the puzzle in place: a good business climate, reliable power and an IEDC data center incentive. The main assurance Bitcoin miners, especially publicly traded ones building mega projects, are looking for is similar treatment (e.g., zoning, deposits, taxes, energy costs) to what other industrial energy consumers, like data centers, receive.
Any state that offers that basic promise will jump to the top of the list for new mega projects.
Two states, Arkansas and Montana, have already blazed the trail by passing legislation to attract these types of projects. Indiana has the opportunity to be the first Midwestern state to make a similarly bold move, which is why I have been working with the Indiana Technology and Innovation Association and Satoshi Action Fund to educate lawmakers on the ins and outs of this opportunity.
With their help, we built enough support with state representatives to submit House Bill 1388 into the most recent legislative session. The session ran out of time before HB 1388 was voted on, so our educational tour will ramp up in order to best position it for the next session.
In the meantime, 13 states, including Ohio, have submitted similar legislation vying for these deals. The question now is whether Indiana will seize this growth opportunity or once again follow in the footsteps of our neighboring states.•
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Rekhter is co-founder and CEO of Megawatt, a Bitcoin mining company.
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