“AI Data Centers” or Bitcoin Mines? Critics Say Utilities Are Rebranding to Tap Taxpayer Cash

By [James P. Hard] — October 17, 2025

Across the United States, a growing number of “AI data center” projects are drawing scrutiny from analysts and local watchdogs who claim the label is being used as a cover for large-scale Bitcoin mining operations — with electric utilities and developers seeking to justify billions in taxpayer-backed infrastructure.

Over the past year, energy-hungry data centers have been pitched as the backbone of America’s artificial intelligence boom. Companies and utilities are promising job creation, technological advancement, and regional competitiveness. But behind the AI rhetoric, critics say, many of these projects look strikingly similar to crypto-mining facilities: massive arrays of high-density servers running nonstop, drawing enormous amounts of power while creating few long-term jobs.

“It’s a rebranding exercise,” said one former utility executive who requested anonymity. “Bitcoin mining has a bad reputation — politically, environmentally, and financially. But call it an AI data center, and suddenly it’s an ‘innovation hub’ that deserves subsidies.”

Power-Hungry Promises

Electric companies in several states have lobbied regulators to expand generation capacity and build new substations to serve what they describe as “AI-driven computing clusters.” These requests often come with proposals for taxpayer incentives, discounted energy rates, or special financing.

But independent energy economists note that many of these proposed facilities are being built by or leased to companies with long histories in cryptocurrency mining. In some cases, public filings show that the firms’ existing operations consist almost entirely of Bitcoin-mining rigs, not AI or cloud-computing hardware.

A Convenient Rebrand