Josh Riley, Terawulf And Big Trouble On Cayuga Lake
A New Data Center Will Burn Fossil Fuels On The Shores Of Cayuga Lake To produce generative AI slop and enable cryptocurrency political corruption.
Congressman Josh Riley Is Helping it happen.
Show Notes:
Welcome to Josh Riley Watch.
This episode starts out with a discussion of Josh Riley’s vote to endorse the political legacy of Charlie Kirk and his “Biblical truth”. It touches Josh Riley’s vote to help Donald Trump’s fascists target 14 year-old children for imprisonment as adults in order to strengthen the military occupation of Washington DC. It mentions Josh Riley’s involvement with the pro-fascist, anti-progressive organization of Searchlight Democrats.
This episode is really about the practical implications, economically, environmentally, and politically, of Josh Riley’s dishonest support for a get-rich-quick-scheme for the ultra wealthy, pretending that it’s about connecting Carhartt-wearing farmers in rural Upstate New York to broadband internet access.
In this podcast, I try to keep Josh Riley Watch about the concrete actions of U.S. Representative Josh Riley. I watch what Josh Riley does in Congress, and I discuss the consequences of his legislative actions.
I’ve been holding back on a big story for several weeks now because there was not an active, legislative link between it and Josh Riley’s work as a member of the U.S. House of Representatives. All I had was a question in my mind: What might Josh Riley do?
Congress has returned to Washington DC from its August recess. With that return, Josh Riley announced his support for two bills that make him an active participant in this matter.
The legislation in question is the Middle Mile For Rural America Act and the ReConnecting Rural America Act. These bills appear to be simple and non-controversial at first. They’re presented as straightforward efforts to give rural Americans better access to broadband Internet service. There’s much more to this legislation than people in the remote countryside wanting to get online and check their email, however.
Abstractly, helping people living in remote locations to get high speed internet access sounds like a good idea. The fact is, though, that federal government programs to bring high speed internet access have existed for decades. Most small towns in America already have such access.
What’s more, the economic benefits of high speed internet access for typical rural Americans are decreasing, not increasing. Opportunities for remote work over the internet peaked during the COVID-19 pandemic, but since then remote work has been getting harder to come by. At the same time, the open web, the user-created internet that has been at the core of online economic opportunity for everyday Americans since the 1990s, is rapidly falling apart. A flood of generative AI slop, combined with Google’s decision to place generative AI chatbot responses at the center of its search engines, has resulted in the sharp decline of web traffic, reducing the amount of money it’s possible for people to make online through content creation.
So, we arrive at the question at the core of this episode:
Why are members of Congress like Josh Riley suddenly focusing on legislation to have the government pay to lay down high speed data lines through rural areas, where few people live, at a time when the availability of online work is decreasing, and when the traditional internet used by most Americans is falling apart under the onslaught of generative AI?
This quest to find an answer to this question requires a complex journey with a lot of stops along the way, but for the sake of this podcast, I’m going to try to express it simply, step by step.
This story could be summed up in a phrase that will sound terribly dull to most people, but I’ll explain how it’s related to the most important and dramatic political issues of our time.
This story is about data centers.
The term “data center” sounds dull, but what data centers do should grab your attention. Data centers are the technological infrastructure at the heart of the most controversial issues of our time: Generative AI, fascism, high utility bills, clean air and water, cryptocurrency, the economy, local political control, climate change, workers’ rights, and political corruption.
Keep one thing in mind we discuss these issues: Data centers are conduits of power.
Data centers consume massive amounts of electrical power, of course, and they do that into order to achieve computational power. This consumption of power isn’t done for its own sake. Data centers are run in order to amass economic power and political power for their owners.
The data centers that are currently being built in massive numbers across the United States are not being constructed to support conventional online activity. They don’t help ordinary Americans and businesses with their online activities. They exist to help venture capitalists make money in two ways:
Cryptocurrency schemes
Generative AI hype
All of this might seem like an abstraction to you, but it’s not. It’s a tangible, local issue that is affecting communities in New York’s 19th congressional district.
A huge new data center is about to be built on the shore of Cayuga Lake.
It’s owned By a company called Terawulf.
On August 14, 2025, Terawulf announced that it had obtained an 80-year lease to operate a former coal-fired electrical power plant that sits just a few feet from the shore of Cayuga Lake in the Town of Lansing. Shortly afterwards, it was announced that Terawulf had gained $1.4 billion from Google in order to support its debt financing, in order to make construction at the Cayuga Lake facility and other data centers possible.
This sounds like a big financial gain for Terawulf and for Google alike, and that was the intent of the announcement of Terawulf’s lease. 80 years sounds like a big commitment for a substantial, well established business. However, this 80-year lease was in fact obtained from a sister company of Terawulf, Riesling Power LLC, which has the same CEO as Terawulf: Paul Prager. It’s a shell game, an example of deceptive self-dealing, which was designed to increase the stock price of Terawulf and create the appearance of a major advancement for Google, now a major investor in Terawulf. Riesling Power has owned the power plant on the shores of Cayuga Lake for years. This company burned coal, and proposed a Bitcoin mining operation on the site. The Terawulf lease is merely the latest in a long line of always-shifting schemes for the Cayuga Lake power plant.
Corporate chicanery is standard operating procedure for Terawulf and Paul Prager. Terawulf is a financially unstable company that has been spending money at an unusually rapid pace without immediately plausible path to profit. Terawulf is making a big gamble, making billions of dollars of investment in the hope that cryptocurrency and generative AI will become legitimate and profitable, though at present they are not. In a report issued just one year ago, Grizzly Research analysts referred to Terawulf as “a charade” and “a house of cards, used by insiders to enrich themselves”.
The report warns: “The CEO, Paul Prager, and his friends are using his previously failed business assets from Beowulf to siphon as much money out of the public company as possible.” The company has a history of poor returns on its Bitcoin mining operations to such an extent that “TeraWulf has missed its original projections by ridiculous margins… missing estimates by 79% and 91%.” The management team has “a history of large business failures and a history of overpromising and underdelivering.”
The Cayuga Lake lease gives Terawulf control over 183 acres of ecologically-sensitive land on the shore of the lake. It also grants Terawulf the right to install massive racks of energy-hungry computers that consume 400 MW of electricity.
Terawulf has yet to submit any specific plans for the data center on Cayuga Lake. So, the facility’s final design could work in several different ways, but none of the possible models are environmentally sustainable. Some reports say that Terawulf has promised not to burn fossil fuels at the site of the Cayuga Lake power plant, but in the past, the sister company of Terawulf has burned coal there.
This much is clear: The Terawulf Cayuga Lake data center will be run mostly by burning dirty fossil fuels, whether that’s at the Cayuga Lake site or elsewhere. This fossil-fuel dependence will require the transportation of large amounts of methane, a substance that is 200 times more destructive to the global climate than carbon dioxide. The press release celebrates a plan to build a solar energy farm on the Cayuga Lake property, but doesn’t make the truth clear: Another company will be building that solar farm, not Terawulf, and not any of the companies owned and operated by CEO Paul Prager. The proposed solar energy farm wouldn’t even be a primary energy source for the Cayuga Lake data center. It would be a completely separate operation feeding into the New York State energy grid, not Terawulf.
So how can Terawulf claim that its energy will be “predominantly zero carbon”? Terawulf has a history of blatant dishonesty about its claims of environmental responsibility. In one version of the Terawulf plans for the Cayuga Lake data center, Terawulf proposes taking all its electricity from NYSEG, saying that NYSEG’s electricity comes mostly from zero carbon sources, but that’s just not true. Most of NYSEG’s sources of electricity are power plants that burn fossil fuels.
Another possibility is that Terawulf will burn methane at the Cayuga Lake data center, directly providing its own dirty energy. There is no possible plan for the Terawulf facility that would make it “predominantly zero carbon”, as claimed. Every possible model makes the Terawulf data center run predominantly on dirty energy, polluting Upstate New York skies and accelerating climate change.
What’s it all for? Why burn all this energy? Why pollute our skies? Some rumors suggest that Terawulf is promising to avoid mining Bitcoin at the Cayuga Lake site, but Terawulf has made no binding commitment to that effect. In fact, throughout its history, Terawulf has been primarily a Bitcoin mining company. Terawulf is predominantly a cryptocurrency enterprise, founded and organized around one goal: Making money through involvement in shady digital get-rich-quick schemes.
Data centers are both literally and figuratively linked in to the nation’s power grid. Data centers are at the heart of the technological transformation and ideological struggle that is bringing the American economy to the edge of catastrophe and the politics of the United States the brink of authoritarianism. If there’s a social issue you care about, the chances are good it’s linked to the rapid construction of data centers across the country.
That makes the new Terawulf data center on Cayuga Lake a potent symbol for the political struggles of our times as they are manifest in New York’s 19th congressional district.
Data centers are at the center of the most controversial political issues of our time.
Data centers began to be constructed in large numbers in order to support cryptocurrency schemes - Bitcoin mining.
Bitcoin mining has nothing to do with digging for ore. The use of the term “mining” in cryptocurrency circles is purely metaphorical. Bitcoin mines are massive banks of high-powered computers that use enormous amounts of electricity in order to perform completely unproductive mathematical problems for no other purpose than to give the owners of the Bitcoin mines a chance to gain claim to a fraction of a Bitcoin.
Bitcoin mines don’t create anything useful for society. They’re about nothing more than the pursuit of money for its own sake.
To be fair, cryptocurrency (of which Bitcoin is one form) does have one proven use case: The bribery of political officials such as Donald Trump. In the seven months since Trump began his second term as President, he and his family have made over one billion dollars through cryptocurrency schemes, including hundreds of millions of dollars in outright bribes.
Terawulf has not explicitly stated that it intends to use the Cayuga Lake data center for Bitcoin mining, but Bitcoin mining is at the heart of Terawulf’s business model, and the company’s subsidiary Beowulf has refused to rule out using the Cayuga Lake data center to engage in Bitcoin mining.
Data centers are what make generative AI possible.
If you think that generative AI chatbots like ChatGPT and generative AI image generators like DALL-E are free, think again. There are currently free versions of these generative AI tools being offered, but this arrangement is temporary. Billionaire venture capitalists are at present paying the costs of generative AI tools, but they’re doing so for a selfish reason: To radically disrupt the economy, destroying traditional forms of work and commerce, thus making society dependent upon generative AI. These wealthy investors are betting that when generative AI tools become indispensable, they’ll be able to make a fortune by charging money for the services.
This process of profit extraction in the wake of social destruction is a classic Silicon Valley strategy known as enshittification. No, I didn’t make that term up, and yes, it’s a real thing. Read Cory Doctorow’s book Enshittification to learn more about it.
Large numbers of jobs have already been eliminated by corporations shrinking their workforces by deploying generative AI tools. These generative AI tools are shockingly unreliable, however, and an MIT study has found that 95% of business ventures depending on generative AI end up being a complete failure. Generative AI tools are designed to offer incorrect information with a veneer of plausibility. Massive amounts of money are being invested in AI-first businesses, and the efforts are typically ending in disaster, creating an economic bubble that is on the verge of complete collapse, threatening to drag the US economy into recession, and perhaps even depression.
At the same time, generative AI has laid waste to America’s educational system at all levels. Generative AI tools introduced into schools in order to save money have been repeatedly proven ineffective, and even downright destructive to learning. Students who use generative AI tools have been shown to have less retention of the information they learn, to have lower rates of academic success, and to lose the ability to engage in original work and critical thinking.
The use of generative AI tools is also linked to reduced happiness, diminished social connection, and severe forms of mental illness collectively referred to as AI psychosis.
Terawulf has declared that a substantial amount of the energy consumed at the new Cayuga Lake data center will go toward computers that support the creation and deployment of generative AI.
Data centers are a manifestation of fascism. It’s not a coincidence that large numbers of data centers and concentration camps are being built at the same time.
Generative AI and cryptocurrency are technologies designed to concentrate social power and wealth, and they’ve being promoted by companies that are closely linked to the fascism being imposed under Donald Trump. The AI companies Meta, OpenAI, Microsoft, and Google have all been major financial contributors to Donald Trump, and have offered their technologies to Trump in the pursuit of fascist ideology.
Palantir, a company run by wealthy Trump supporter Peter Thiel, combines AI with surveillance technologies to target people for imprisonment by masked ICE agents, sending its victims to America’s rapidly growing system of concentration camps. Here in Ithaca, we have our own local version of this fascism, with Flock digital cameras hooked up to automated image recognition software being used to track residents wherever they go.
Cryptocurrency has replaced democratic government controlled by voters with a fascist oligarchy in which the wealthy bribe with crypto coins in order to get the policies they want. Generative AI is engaged in literal dehumanization.
Terawulf and other data centers like it exist in order to support these fascist technologies.
Data centers are a significant factor in the rapid increase of utility bills - NYSEG - In April this year, Democratic Congressman Suhas Subramanyam warned his colleagues about the negative impact of data centers on his district in Virginia, which has the highest concentration of data centers of any congressional district in the nation.
“When these data centers were approved, they seemed like a great idea at the time, and talked about lower property taxes and revenue for the counties, but our community is paying the price now. We are a cautionary tale for the rest of the country… We are paying the price now for many of these data centers. In the next five years alone, data centers could increase customers’ bills by up to $276 a year, and people’s utility bills may double in the next seven to ten years just to power data centers. The environmental impact is real, as well. These green spaces are disappearing, pollution is rising, and water supplies are being stretched thin.”
Terawulf has a history of issuing false statements about the sources of the energy used in its data centers, consistently drawing on the energy grid and raising prices for Upstate New York consumers while claiming not to do so. A HunterBrook investigation concluded that, “TeraWulf’s claims of using “excess” renewable energy that would otherwise go to waste are also contradicted by state energy officials and experts, who say there is no surplus renewable power in New York — with bitcoin mining increasing consumption of oil and gas.”
Climate Change
Terawulf’s press release about its lease of the Cayuga Lake site attempts to create the impression that the data center will be “sustainable”, by discussing a small portion of its energy plans as “predominantly zero carbon”. Solar cells will provide only 16.75% of the data center’s energy, however. The rest of Terawulf’s energy use will be planned in accordance with TeraWulf’s “low-cost operating model”. According to Terawulf’s own description, over 80% of the Cayuga Lake facility’s energy can come from the burning of fossil fuels.
In fact, a Terawulf document specifically proposes using trucks burning fossil fuels to transport yet more fossil fuels to the Cayuga data center, writing that, “the power plant owners could pursue an existing repowering application (via trucked natural gas) at Cayuga”.
Grizzly Research observes that Terawulf “portrays itself as an ESG/sustainable miner, but that cannot be further from reality”. Recently, Terawulf has acquired Beowulf, a company that was also founded by Terawulf’s CEO. A HunterBrook investigation found that Beowulf is highly involved in electrical power plants that burn massive amounts of coal, the dirtiest of the fossil fuels.
Terawulf repeatedly claimed that its Lake Mariner data center, which sits on Lake Ontario between Rochester and Syracuse, would use “zero-carbon” energy from the New York State power grid, but these claims simply weren’t true. 51% of the power in the New York State electrical grid is derived the burning of fossil fuels. Nuclear power is a major source of electricity that Terawulf counts as “zero-carbon”, even though the mining and refinement of nuclear fuel requires the extensive use of fossil fuels.
In 2018, Ethan Gormley of the New York Public Interest Research Group warned of the consequences of efforts to redevelop the Cayuga facility as a site for the burning of methane. He wrote:
“If we allow Cayuga to go online, we will only further encourage fossil fuel dependency and greenhouse gas pollution for decades to come… The Cayuga Gas Power Plant will encourage fracking in Pennsylvania, harming our neighbors and our planet. Methane is ubiquitous and a much more potent greenhouse gas than carbon dioxide. During storage, transportation and extraction, methane leaks and continues to ignite the global climate crisis.”
Clean Air And Water
Terawulf communications suggests that one possible plan for running its Cayuga data center involves pumping massive amounts water from Cayuga Lake to cool its banks of high-powered computers, then dumping the hot water back into Cayuga Lake. Terawulf celebrates the “industrial-scale water intake system” already present at the Cayuga Lake site as part of its “critical components for supporting enterprise-scale computing workloads.”
One of the consequences of warm lake water is the growth of harmful algal blooms that contain neurotoxins that can make people sick from swimming in the lake. Scientific research shows that neurotoxins from harmful algal blooms can sicken people who aren’t even in the Cayuga Lake, but are merely downwind from it, as winds pick up aerosolized particles of neurotoxins and carry them into the lungs of people living near the water.
An alternative method of cooling the Cayuga Lake data center’s computers is the use of massive evaporation tanks to cool down the millions of gallons of water pumped through the center daily. The water would then be returned to Cayuga Lake at a somewhat lower temperature. This elaborate system would avoid heating up Cayuga Lake directly, but would still create a local weather anomaly. Heat doesn’t just disappear over time, after all, and the amount of water that would evaporate from huge lagoons would have an impact. Besides that, this process remains energy intensive, requiring the burning of even more fossil fuels, accelerating climate change, which is already heating up Cayuga Lake to dangerous temperatures.
This year, during parts of the summer, locals were warned that no part of Cayuga Lake could be guaranteed as safe to swim in. Terawulf’s data center would only make the problem of neurotoxins in our water and air more dangerous.
Yet another alternative to water-based cooling system is air-cooling using industrial fans. Town meeting records from another data center run by Terawulf, Lake Mariner on Lake Ontario, document that this cooling system creates a serious problem with noise pollution in a radius of two miles around the facility. Neighbors of Lake Mariner are fed up with it, but Terawulf has been unable or unwilling to solve the problem. At the location of Terawulf’s proposed data center, Cayuga Lake is a little bit less than two miles across. So, if Terawulf uses an air-cooling system, the tranquil silence of a large section of Cayuga Lake will be replaced by the droning of industrial machinery.
Cryptocurrency
Terawulf’s press release announcing its plans to create the data center on Cayuga Lake explicitly mentions “the ability to mine bitcoin profitably” and includes “bitcoin mining” as part of its planned operations.
Josh Riley Watch has covered Josh Riley’s repeated favors for the cryptocurrency industry, which at present exists primarily as a technology to facilitate massive political corruption and criminal scams. Search back through previous episodes, and you’ll find plenty of explanation of what makes cryptocurrency so dangerous. Put simply, cryptocurrency is the life blood of American fascism. Josh Riley has repeatedly voted to help the fascist takeover of American democracy by deregulating cryptocurrency.
Neither the Reconnecting Rural America Act nor the Middle Mile for Rural America Act originates with Josh Riley. Congressman Riley is just a co-sponsor of these bills. The legislation is written by lobbyists and primarily sponsored by Republican members of Congress: Zachary Nunn and Randy Feenstra.
Representative Randy Feenstra has particularly strong ties to the data center industry. On July 2 last year, Feenstra gave a sycophantic speech at a Google data center in Council Bluffs, Iowa, telling Google executives, “I just want to say thank you, and personally in my life, Google has been very important”, while celebrating the construction of the data center and “what it will do for artificial intelligence as we move forward”.
Rural Broadband Legislation Is Primarily For Data Centers, Not Rural New Yorkers
You might ask yourself what all this talk of data centers has to do with Congressman Josh Riley. It’s at this point that we need to bring the focus back to the Reconnecting Rural America Act and the Middle Mile for Rural America Act, the legislation that Riley is sponsoring along with Republicans Randy Feenstra and Zachary Nunn.
FastMode, a source of news on digital technology, reports that middle mile legislation, and other bills that seem to be about bringing broadband access to residents of rural areas are, in fact, ultimately designed to provide government funding to support the creation of data centers. Kurt Raaflaub of FastMode explains:
”Further data center growth in the area and many urban areas is stifled due to the lack of large parcels of land and the lack of local power generation. Bloomberg reported in 2024 that there was a seven-year wait for data center power hook up in Virginia. However, as we improve data center interconnect infrastructure, we will rely less on the need for geographic proximity and consider proximity as it relates to time or latency… The current space and power challenges of urban data center operations present an opportunity for data center expansion in rural areas. The operational advantages of deploying data centers in rural areas are compelling… Ideal data center sites often need to accommodate over a million square feet of space and hundreds of MW of power to meet the needs of hyperscale customers. These specific criteria can be met by many rural areas. This means rural broadband transport networks could act not only as aggregation networks, but also as data center and middle-mile interconnect.”
A sponsored article written by Bill Long, an executive at telecommunications company Zayo, states the case more plainly.
“We’re seeing additional interest in rural communities from hyperscalers — the Googles and Amazons of the world responsible for ushering in the first wave of AI. Why? Because AI workloads require a massive amount of data, and hyperscalers need somewhere to put it. Hyperscalers are investing millions in data center campuses to house this data, but the space and power requirements for these campuses are pushing them out of the large metropolitan areas and into more rural locations—where space and power are plenty and cheap. But, these data centers also need high-speed internet—and lots of it. So what does this mean? Middle-mile infrastructure will be the next frontier… By investing in the middle-mile infrastructure, we can drive faster deployment of AI. AI has the potential to transform our digital economy at an order of magnitude reminiscent of the Cloud and the early days of the internet itself. But these transformations require infrastructure that is robust and sophisticated enough to support—and that infrastructure isn’t built overnight… By prioritizing investment in the middle-mile backbone, we are providing the critical runway to accelerate the deployment of AI and ensure we have ample infrastructure in place to allow this technology to scale.”
At the beginning of this episode, I asked a question: Why are members of Congress like Josh Riley suddenly focusing on laying down high speed data lines through rural areas, where few people live, at a time when the availability of online work is decreasing, and when the traditional internet used by most Americans is falling apart under the onslaught of generative AI?
Kurt Raaflaub and Bill Long provide us with the foundation of a good explanation. The ReConnecting Rural America Act and the Middle Mile for Rural America Act are designed to encourage data centers owned by venture capitalists who live in luxurious homes in far away cities under the pretext of providing internet access to country folks. The bills supported by Josh Riley exist for the benefit of cryptocurrency miners and Silicon Valley corporations running generative AI schemes.
Why should the government pay for the construction of vast networks of technology to enable extremely fast data transmission throughout rural America?
I can anticipate some people arguing that the construction of networks of extremely fast data transmission technology through countryside is like rural electrification in the 1930s. One problem with that analogy is that the population of the United States is much less rural now than it was in the 1930s. In the 1930s, about 50% of Americans live in rural settings. Now, only 20% of Americans do.
Another problem with the rural electrification analogy is that the technology that would be installed across rural America isn’t like the electric lines that were installed through rural areas in the 1930s. It’s more like installing industrial grade lines of high transmission energy towers. Rural electrification was about enabling households to have light bulbs and refrigerators. It wasn’t about building factories where there had been farms.
The people who will benefit from the legislation supported by Josh Riley will be the wealthy owners and investors in digital technology businesses, not simple country folks who have never been on the internet before. People living in most parts of rural America already have access to the internet, and the vast majority of rural Americans have broadband internet access. According to the most recent report by the Federal Communications Commission, only 22.3% of rural Americans lacked high speed internet access at the time of the report. That report is five years old, and only described data from before 2018 - seven years ago. Broadband internet access in rural areas has been improving year after year.
According to the FDA, as of two years ago, only 14 percent of rural American households lacked high speed internet access. “The gap between urban and rural or Tribal areas has narrowed each year,” the FCC reported. Specifically, the FCC report showed that, between the years of 2014 and 2018, rural broadband internet access expanded at an average annual rate of 4.35 percent. If that rate held true over the last seven years, every single rural American would have broadband internet access. Of course, that rate probably hasn’t stayed steady, because the very few people in rural America who still don’t have access to high speed internet are for the most part quite far from modern infrastructure in general, and typically don’t even have municipal water access. That’s why the benefit to rural households from investment in expansion of high speed internet lines diminishes every year it continues.
Another difference between rural expansion of broadband internet and the rural electrification program of the 1930s is that rural electrification took place through federal loans to cooperative networks. The Middle Mile for Rural America Act and the ReConnecting Rural America Act of 2025 don’t just provide loans. They also give outright grants of federal government money.
If the legislation Josh Riley has endorsed passes into law, the American people are going to be paying to set up digital infrastructure to benefit wealthy investors, and we won’t ever be paid back. Cryptobros and generative AI scammers will profit from government assistance, at the same time that schools, health care, and disaster assistance endure harsh budget cuts. The real needs of rural Americans will be ignored while people who already have plenty of money make a killing.
For more on the issues related to the Terawulf data center read the recent article by the Ithaca Voice.