Blockspace: AI & Bitcoin — "ENERGY: An Update on TeraWulf’s AI Expansion w/ Nazar Khan"
Date: March 12, 2026
Host: Blockspace Media (Charlie Spears & Colin Harper)
Guest: Nazar Khan, CTO of TeraWulf
Episode Overview
In this episode, Blockspace Media hosts sit down with Nazar Khan, CTO of TeraWulf, to deliver an in-depth update on TeraWulf’s ambitious AI data center and brownfield site expansion plans. With significant developments in Kentucky and Maryland, TeraWulf positions itself at the intersection of energy, AI, and Bitcoin mining. Khan provides details on project timelines, technical strategies, and how TeraWulf leverages power expertise to create next-generation compute campuses. The conversation also touches on battery storage, market and geopolitical impacts, regulatory environments, and TeraWulf’s evolving stance towards Bitcoin mining as AI demand soars.
Key Discussion Points & Insights
1. TeraWulf’s Unconstrained Approach to Data Center Buildouts
- Khan describes TeraWulf's advantage as entering the data center and AI compute space without legacy constraints.
- “We are not saying, hey, this is how we used to do it five years ago or three years ago or seven years ago. Therefore, it should be something like this. We're coming out and saying, what's the issue? What's the problem? What are we solving for? And how do we go about coming up with this solution for it?... I think we do have an advantage in that we're unconstrained in how we're approaching solving some of these issues.” — Nazar Khan [00:00]
- The company leans deeply on its expertise in power distribution and industrial site redevelopment.
2. Major Site Expansions: Kentucky and Maryland
- Kentucky Site (Hawesville):
- Former Century Aluminum smelter; 480MW of readily available power.
- Target: 480MW gross, 380MW net online in H2 2027.
- Community engagement: town hall meetings, job fairs, and positive local reception.
- “As a part of that process we're also remediating and cleaning up a former smelter site... that site will be available for any expansions.” — Nazar Khan [04:14]
- Multiple redundant power lines (five 161kV lines) offer reliability.
- Maryland Site (Morgantown):
- Former 1.5GW coal power facility. Plan: Add 1GW efficient gas generation, 500MW battery storage, phased buildup.
- Site to become "a net supplier of energy back to the grid" and significant new grid resource.
- Nine transmission lines across three utilities ensure robust connections.
3. Battery Storage & Dynamic Power Management
- TeraWulf is integrating large-scale battery storage for both reliability and grid support:
- Serves as peak shaving and buffer against load variability.
- “The battery also serves as a buffer with respect to just the shape of the load itself... a dual function of being a grid resource... and a buffer for the variability.” — Nazar Khan [10:38]
- Growing trend industry-wide, as seen in Google-Form Energy deals.
4. Timelines, Procurement, and Market Dynamics
- Kentucky: In tenant negotiations now, aiming for a 2027 delivery.
- Maryland: Delivery targeted for 2028–2029; working through timelines.
- Current construction (Lake Mariner, Abernathy campuses) remains on schedule, benefiting from advanced procurement and close tenant relationships.
- "There's not any information gap in what's happening with respect to construction at the site between us and our tenants. And they've got the very same goal that we do..." — Nazar Khan [19:52]
- Conflict in the Gulf/Iran is being monitored, but so far little immediate supply chain impact—future contracts could be affected if disruptions persist.
- “It is something that we are talking about and thinking through... but again, it's in my mind from where I sit, you know, it's a little bit early to, to be able to speak to the specific and quantifiable requirements." — Nazar Khan [24:59]
5. Brownfield vs. Greenfield Site Strategy
- Brownfield (redeveloping former industrial sites) provides cost/time benefits due to existing robust power infrastructure; TeraWulf’s preferred model.
- “So that embedded infrastructure has a cost component, obviously. But in addition... a time component... fully integrated into the system, into the grid.” — Nazar Khan [17:27]
6. Operational Complexity & Power Plant Management
- TeraWulf’s background (Veil Energy) positions them to operate both power generation and data center facilities:
- Teams dedicated to power plant operations run in parallel with data center operations.
- “It's kind of going back to our roots and we're very well equipped... more and more... being able to design, develop, operate, build power is a critical component.” — Nazar Khan [28:25]
- Maryland campus: will import, export, and buffer energy flows, acting as a sophisticated microcosm of future grid challenges.
7. AI Data Center Architecture & Industry Learning Curve
- Fluidstack partnership: Standard 168MW rollout (four 42MW halls) is driven by current hardware architecture.
- “It's really the hardware architecture that drives that... and that's where we ended up on this 162megawatt design comprised of four data halls.” — Nazar Khan [34:40]
- Each new site iteration incorporates learnings—flexible architectures anticipated for future hardware generations.
- “...the rules are changing and the best practices are changing as you all build these data centers... Which is probably pretty exciting, but also, I would think, kind of frightening in some ways...” — Host [38:15]
- “...for better, for worse, we come at it unconstrained.” — Nazar Khan [39:00]
8. Regulatory Headwinds & Public Perception
- Rising criticism of data centers; recent New York moratorium bill discussed.
- Khan emphasizes that much of the blame for grid shortages lies with market failures to bring new generation online—not merely new load from data centers.
- “...the biggest driver of load growth, which is, you know, highlighting this issue, is data space. So I think again, the pointing of the finger at data centers really kind of comes from, in my mind, from that kind of a construct and backdrop.” — Nazar Khan [42:21]
- Advocates for proactive stakeholder engagement and using AI/data centers as assets, not burdens, to grid reliability.
9. The Future of Bitcoin Mining at TeraWulf
- AI workloads are vastly outcompeting mining on a revenue-per-power basis; expect phased "cannibalization" of bitcoin mining as AI ramps.
- “If you just look at the raw economics... it's not even close. The mining economics of 2019 or 2020... that's not the world that we're in today.” — Nazar Khan [48:34]
- Bitcoin mining remains as potentially valuable "swing" load—a highly economically rational and flexible buffer for grid and site management.
- "...I continue to believe that bitcoin mining can continue to serve that purpose... there is, I think, a role to play for these highly dispatchable, economically rational loads." — Nazar Khan [48:34]
Notable Quotes & Memorable Moments
-
On Brownfield Development:
“The benefit that we see... is really the embedded infrastructure that comes with that site... the time also component is critical in thinking about the value of these rockless sites.” — Nazar Khan [17:27] -
On TeraWulf's Roots:
“Prior to TerraWolf, we had a company called Veil of Energy... so running, building, operating power plants was our entire business up until 2018, 2019... So for us, it's kind of going back to our roots.” — Nazar Khan [28:25] -
On Data Center Flexibility:
“...the architecture that we worked closely with Fluidstack and Google... really to optimize the use of that hardware. And that's where we ended up on this 162megawatt design... comprised of four data halls.” — Nazar Khan [34:40] -
On Market Disruption:
"...for better, for worse, we come at it unconstrained. We are not saying, hey, this is how we used to do it five years ago..." — Nazar Khan [00:00, 39:00] -
On Industry Change:
“This is a new ball game. This is not traditional data center storage. This isn’t traditional data center compute. This is an entirely different new class of compute. And the rules are changing...” — Host [38:15] -
On Bitcoin Mining’s Evolving Role:
"Bitcoin mining, however, is in, in my mind, you know, the, the most economically rational load known to rank on... over time, I think, there will be some discussion on can there be a role for bitcoin miners to kind of be that buffer, that swing between peak PE and kind of average PE..." — Nazar Khan [48:34]
Important Timestamps
- [00:00] — Nazar Khan introduces TeraWulf’s unconstrained approach
- [04:14] — Details on new Kentucky and Maryland sites
- [10:38] — Rationale behind battery storage and dynamic load management
- [19:52] — Construction updates for Lake Mariner, Abernathy, and lessons learned
- [24:59] — Impacts of Iran conflict on procurement/shipping
- [28:25] — Khan on the complexity and operations of running both power plants and data centers
- [34:40] — Fluidstack partnership and architecture of new AI data halls
- [41:52] — Data center regulation, New York moratorium bill, and wider grid concerns
- [48:34] — TeraWulf’s strategy for phasing out Bitcoin mining as AI takes precedence
Final Thoughts
This episode provides a rare inside look at TeraWulf’s agile, power-first approach in the fierce new era of AI-driven compute infrastructure. Nazar Khan’s technical and operational transparency illustrates both the promise and challenges of repurposing industrial America for the AI age—bridging power generation, data center innovation, and the ongoing evolution of Bitcoin mining.
For listeners tracking the convergence of energy, AI, and crypto, TeraWulf’s story is a microcosm of broader market, regulatory, and technological shifts unfolding right now.