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Elon Musk’s New AI Data Center Raises Alarms Over Pollution

Elon Musk's xAI to Develop New Supercomputer in Memphis

In July, Elon Musk made a bold prediction: that his artificial intelligence startup xAI would release “the most powerful AI in the world,” a model called Grok 3, by this December. The bulk of that AI’s training, Musk said, would happen at a “massive new training center” in Memphis, which he bragged had been built in 19 days.

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But many residents of Memphis were taken by surprise, including city council members who said they were given no input about the project or its potential impacts on the city. Data centers like this one use a vast amount of electricity and water. And in the months since, an outcry has grown among community members and environmental groups, who warn of the plant’s potential negative impact on air quality, water access, and grid stability, especially for nearby neighborhoods that have suffered from industrial pollution for decades. These activists also contend that the company is illegally operating gas turbines.

“This continues a legacy of billion-dollar conglomerates who think that they can do whatever they want to do, and the community is just not to be considered,” KeShaun Pearson, executive director of the nonprofit Memphis Community Against Pollution, tells TIME. “They treat southwest Memphis as just a corporate watering hole where they can get water at cheaper price and a place to dump all their residue without any real oversight or governance.” 

Some local leaders and utility companies, conversely, contend that xAI will be a boon for local infrastructure, employment, and grid modernization. Given the massive scale of this project, xAI’s foray into Memphis will serve as a litmus test of whether the AI-fueled data center boom might actually improve American infrastructure—or harm the disadvantaged just like so many power-hungry industries of decades past.

Artificial intelligence company xAI

“The largest data center on the planet”

In order for AI models to become smarter and more capable, they must be trained on vast amounts of data. Much of this training now happens in massive data centers around the world, which burn through electricity often accessed directly from public power sources. A recent report from Morgan Stanley estimates that data centers will emit three times more carbon dioxide by the end of the decade than if generative AI had not been developed. 

Read More: How AI Is Fueling a Boom in Data Centers and Energy Demand

The first version of Grok launched last year, and Musk has said he hopes it will be an “anti-woke” competitor to ChatGPT. (In practice, for example, this means it is able to generate controversial images that other AI models will not, including Nazi Mickey Mouse.) In recent interviews, Musk has stressed the importance of Grok ingesting as much data as possible to catch up with his competitors. So xAI built its data center, called Colossus, in Southwest Memphis, near Boxtown, a historically Black community, to do a bulk of the training. Ebby Amir, a technologist at xAI, boasted that the new site was “the largest AI datacenter on the planet.”

Local leaders said the plant would offer “good-paying jobs” and “significant additional revenues” for the local utility company. Memphis Mayor Paul Young praised the project in a statement, saying that the new xAI training center would reside on an “ideal site, ripe for investment.” 

But other local officials and community members soon became frustrated with the project’s lack of details. The Greater Memphis Chamber and Memphis, Gas, Light, and Water Division (MLGW) signed a non-disclosure agreement with xAI, citing privacy of economic development. Some Memphis council members heard about the project on the news. “It’s been pretty astounding the lack of transparency and the pace at which this project has proceeded,” Amanda Garcia, a senior attorney at the Southern Environmental Law Center, says. “We learn something new every week.”

For instance, there’s a major divide between how much electricity xAI wants to use, and how much MLGW can provide. In August, the utility company said that xAI would have access to 50 megawatts of power. But xAI wants to use triple that amount—which, for comparison, is enough energy to power 80,000 households. 

MLGW said in a statement to TIME that xAI is paying for the technical upgrades that enable them to double their power usage—and that in order for the company to reach the full 150 megawatts, there will need to be $1.7 million in improvements to a transmission line. “There will be no impact to the reliability of availability of power to other customers from this electric load,” the company wrote. They also added that xAI would be required to reduce its electricity consumption during times of peak demand, and that any infrastructure improvement costs would not be borne by taxpayers.

In response to complaints about the lack of communication with council members, MLGW wrote: “xAI’s request does not require approvals from the MLGW Board of Commissioners or City Council.” 

But community members worry whether Memphis’s utilities can handle such a large consumer of energy. In the past, the city’s power grid has been forced into rolling blackouts by ice storms and other severe weather events.

And Garcia, at the SELC, says that while xAI waits for more power to become available, they’ve turned to non-legal measures to sate their demand, by installing gas combustion turbines on the site that they are operating without a permit. Garcia says the SELC has observed the installation of 18 such turbines, which have the capacity to emit 130 tons of harmful nitrogen oxides per year. The SELC and community groups sent a letter to the Shelby County Health Department demanding their removal—but the health department responded by claiming the turbines were out of their authority, and referred them to the EPA. The EPA told NPR that it was “looking into the matter.” A representative for xAI did not immediately respond to a request for comment.

Much of Memphis is already smothered by harmful pollution. The American Lung Association currently gives Shelby County, which contains Memphis, an “F” grade for its smog levels, writing, “the air you breathe may put your health at risk.” A local TV report this year named Boxtown the most polluted neighborhood in Memphis, especially during the summer.

Boxtown and its surrounding neighborhoods have historically suffered from poverty and pollution. Southwest Memphis’s cancer rate is four times the national average, according to a 2013 study, and life expectancy in at least one South Memphis neighborhood is 10 years lower than other parts of the city, a 2020 study found. The Tennessee Valley Authority has been dumping contaminated coal ash in a nearby landfill. And a Sterilization Services of Tennessee facility was finally closed last year after emitting ethylene oxide into the air for decades, which the EPA linked to increased cancer risk in South Memphis.

A representative for the Greater Memphis Chamber, which worked to bring xAI to Memphis, wrote to TIME in response to a request for comment: “We will not be participating in your narrative.”

City of Memphis struggles with lead pipes and water company doing patrial replacements.

Potential impact on water

Environmentalists are also concerned about the facility’s use of water. “Industries are attracted to us because we have some of the purest water in the world, and it is dirt cheap to access,” says Sarah Houston, the executive director of the local environmental group of the nonprofit Protect Our Aquifer.

Data centers use water to cool their computers and stop them from overheating. So far xAI has drawn 30,000 gallons from the Memphis Sand Aquifer, the region’s drinking water supply, every day since beginning its initial operations, according to MLGW—who added that the company’s water usage would have “no impact on the availability of water to other customers.”

But Houston and other environmentalists are concerned especially because Memphis’s aging water infrastructure is more than a century old and has failed several winters in a row, leading to boil advisories and pleas to residents to conserve water usage during times of stress. “xAI is just an additional industrial user pumping this 2,000 year old pure water for a non-drinking purpose,” Houston says. “When you’re cooling supercomputers, it doesn’t seem to warrant this super pure ancient water that we will never see again.”

Memphis’s drinking water has also been threatened by contamination. In 2022, the Environmental Integrity Project and Earthjustice claimed that a now-defunct coal plant in Memphis was leaking arsenic and other dangerous chemicals into the groundwater supply, and ranked it as one of the 10 worst contaminated coal ash sites in the country. And because xAI sits close to the contaminated well in question, Houston warns that its heavy water usage could exacerbate the problem. “The more you pump, the faster contaminants get pulled down towards the water supply,” she says.

MLGW contends that xAI’s use of Memphis’s drinking water is temporary, because xAI is assisting in the “ the design and proposed construction” of a graywater facility that will treat wastewater so that it can be used to cool data centers machines. MLGW is also trying to get Musk to provide a Tesla Megapack, a utility-scale battery, as part of the development.

Houston says that these solutions will be beneficial to the city—if they come to fruition. “We fully support xAI coming to the table and being a part of this solution,” she says. “But right now, it’s been empty promises.”

“We’re not opposed to ethical economic development and business moving into town,” says Garcia. “But we need some assurance that it’s not going to make what is already an untenable situation worse.” 

Disproportionate harm

For Pearson, of Memphis Community Against Pollution, the arrival of xAI is concerning because as someone who grew up in Boxtown, he says he’s seen how other major corporations have treated the area. Over the years, Memphis has dangled tax breaks and subsidies to persuade industrial companies to set up shop nearby. But many of those projects have not led to lasting economic development, and have seemingly contributed to an array of health problems of nearby residents.

For instance, city, county and state officials lured the Swedish home appliance manufacturer Electrolux to Memphis in 2013 with $188 million in subsidies. The company’s president told NPR that it intended to provide good jobs and stay there long-term. Six years later, the company announced it would shut down their facility to consolidate resources for another location, laying off over 500 employees, in a move that blindsided even Mayor Jim Strickland. Now, xAI has taken over that Electrolux plant, which spans 750,000 square feet.

“Companies choose Memphis because they believe it is the path of least resistance: They come here, build factories, pollute the air, and move on,” Pearson says.

Pearson says that community organizations of southwest Memphis have had no contact or dialogue with xAI and its plans in the area whatsoever; that there’s been no recruiting in the community related to jobs, or any training related to workplace development. When presented with claims that xAI will economically benefit the local community, he harbors many doubts. 

“This is the same playbook, and the same talking points passed down and passed around by these corporate colonialists,” Pearson says. “For us, it is empty, it’s callous, and it’s just disingenuous to continue to regurgitate these things without actually having plans of implementation or inclusion.”

There’s Another Important Message in Taylor Swift’s Harris Endorsement

Opening Night of Taylor Swift | The Eras Tour

Minutes after the presidential debate ended on Tuesday, Taylor Swift mobilized her enormous fanbase in support of Kamala Harris by endorsing her in an Instagram post that quickly garnered 8 million likes. Swift’s decision wasn’t altogether surprising, given that she supported Joe Biden in the 2020 election and recently offered hints, in true Taylor fashion, that she was headed in this direction.

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But what was especially notable in her Instagram post was that it spent as much time praising Kamala Harris as it did warning the public about the dangers of AI.

“Recently I was made aware that AI of ‘me’ falsely endorsing Donald Trump’s presidential run was posted to his site. It really conjured up my fears around AI, and the dangers of spreading misinformation,” Swift wrote. “It brought me to the conclusion that I need to be very transparent about my actual plans for this election as a voter. The simplest way to combat misinformation is with the truth.” 

Swift was referring to a post from Trump in August on Truth Social, his social media site, which appeared to show the superstar and her fans endorsing him. He captioned the photo with: “I accept.” But the images looked glossy and had strange visual details, because they were created with AI.

Many viewers of the images were able to immediately identify them as fabricated. And following Swift’s post, it appears that her response refuting the images had a greater impact than the AI images themselves. But the incident could be a harbinger of plenty of AI-driven conflict in elections for years to come. 

“We are already in a bit of a crisis where a lot of American voters don’t trust elections,” says Craig Holman, a government affairs lobbyist at the nonprofit Public Citizen. “If we’re going to have this type of campaign going on all around us, feeding us information that doesn’t exist, trying to influence our votes based on that—the entire integrity of elections is very much at risk.”

Deepfakes proliferate around celebrities, elections

During the 2020 presidential election, AI tools were still largely rudimentary. In the time since, the capabilities of these tools have improved at an astounding clip. Users around the world can now use AI to create realistic images, images, and audio. Fake social media profiles that spread propaganda can be created cheaply; political parties can use AI to quickly send personalized messages to thousands of potential voters; and fake event photography and even voicemails that sound like celebrities can be put together easily. 

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Some of these tools have been used in political influence campaigns. Last year, the RNC released an AI-generated video depicting a future dystopia if Joe Biden were to be re-elected. Elon Musk shared an AI image photo of Kamala Harris in Soviet-style garb, writing on X that she wants to be a “communist dictator from day one.” A fake video of a Chicago mayoral candidate making inflammatory comments about police shootings was released on the eve of that election in February and watched thousands of times on X before it was taken down. And during the Indian election this year, deepfakes were deployed en masse to create misleading videos of Bollywood celebrities and ads with Hindu supremacist language. 

Read More: As India Votes, Modi’s Party Misleads Online

Taylor Swift has been the frequent subject of many AI efforts, given her massive celebrity. Early this year, AI-generated pornographic and sometimes violent images of her were widely circulated on social media. The images helped spur legislation in the U.S. aimed at protecting deepfake victims, including the DEFIANCE Act, which allows deepfake victims to sue people who create, share or receive them, and passed the Senate in July. AI companies also scrambled to respond: Microsoft said that it was “continuing to investigate these images” and added that it had “strengthened our existing safety systems to further prevent our services from being misused to help generate images like them.”

And Swift’s involvement is part of a growing backlash against AI from some of the world’s most prominent cultural figures. Beyonce recently spoke out against AI misinformation in a GQ interview, saying: “We have access to so much information – some facts, and some complete bullshit disguised as truth…Just recently, I heard an AI song that sounded so much like me it scared me. It’s impossible to truly know what’s real and what’s not.” Meanwhile, earlier this year, Scarlett Johansson blasted OpenAI for releasing a chatbot voice seemingly modeled upon hers.

How Trump’s deepfake move ultimately backfired

Trump has had a long-standing fascination with Swift, including calling her “fantastic” in 2012 and “unusually beautiful” in 2023. In February, Trump took credit for some of Swift’s success, posting on Truth Social that if she were to endorse Joe Biden, it would be “disloyal to the man who made her so much money.” 

But when Trump decided to post the deepfakes on Truth Social in August, his attempt at collecting Swifties appeared to have backfired. The post allowed Swift to frame her endorsement of Harris as a moral obligation; as if she had no other choice but to respond to misinformation. It also sucked up all the oxygen that Trump hoped to gain on debate night: by Wednesday morning, “Taylor Swift endorsement” was the second trending topic on Google, trailing only “who won the debate.” 

In her early years of fame, Swift refrained from speaking about politics, telling TIME in 2012 that she didn’t believe she knew “enough yet in life to be telling people who to vote for.” Over the last six years, she’s waded into politics sparingly, but with purpose, always giving strong justifications for her statements. In 2020, for example, she accused Trump of “stoking the fires of white supremacy and racism your entire presidency.” This year, Swift remained silent on politics until last night’s endorsement, garnering criticism from many people who urged her to use her unrivaled platform to make a difference. 

Read More: Watch Tim Walz React to Endorsement From ‘Fellow Cat Owner’ Taylor Swift

It’s unclear what impact these efforts have had on voters: many researchers argue that voters are more discerning than people fear, and that the potential influence of AI misinformation on elections is overblown. 

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However, Holman, at Public Citizen, says that those studies relied upon outdated AI tools. He points to a deepfakes database created by researchers at Northwestern earlier this year, which has documented hundreds of political deepfakes, many of which have resulted in real-world harms, the researchers found. 

“We’re in a whole new era right now,” Holman says. “Technology has become so convincing, so persuasive, and so indistinguishable from reality, that I am quite convinced it’s going to have a much more serious ramifications on future election cycles.”  

Inside the Rise of Bitcoin-Powered Pools and Bathhouses

Bathhouse

The scene inside Bathhouse, a spa in Manhattan, is one of complete serenity. Visitors recline in 105-degree pools, surrounded by cedar tiles and elegant marble slabs from Brazil. But just beyond closed doors, in harshly-lit back rooms, an unexpected source helps forge the bliss: rows and rows of continuously-running Bitcoin mining computers.

The idea of a Bitcoin mine heating a pool sounds strange. The machines run constantly to find new Bitcoin and safeguard the Bitcoin network. The heat they generate from their activity is extracted via pipes, and powers the Bathhouse’s heated pools and marble stones. Co-owner Jason Goodman says the technique allows him to warm his pools more efficiently than traditional methods, while also accruing a stockpile of Bitcoin he hopes will increase in value going forward. 

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Around the world, a handful of establishments are turning to the same methods in an attempt to harness energy from intensive computing for greater societal use, including to heat a town in Finland and an Olympic pool in Paris. But while proponents argue that these solutions could lower local energy costs and reduce electricity and water usage, some environmentalists worry these small-scale methods obscure much bigger problems. Data centers use a massive and increasing amount of energy, with many of them powered by fossil fuels—and most of their heat waste isn’t being channeled into productive uses at all. 

“Heating a swimming pool with wasted data center energy on its face is a good idea, but it sort of looks like using a gas-guzzling Hummer’s radiator as a panini press,” Jeremy Fisher, Sierra Club’s principal advisor on climate and energy, wrote to TIME. “Maybe it’s clever, but it doesn’t really address the core issue that we need to power our economy with clean energy in order to avoid the climate crisis.”

Bitcoin at the Bathhouse

Bathhouse started operating in Brooklyn in 2019, offering heated pools, cold plunges and saunas to New Yorkers hoping to relax. Initially, co-owners Goodman and Travis Talmadge heated their pools with electric heaters, which were the cheapest option, Goodman says. “But they’re real electric pigs: you’re adding energy to the water at all times by just sucking power out of the wall,” he says. “Typically, the cheapest way to do something is probably the least energy conservative.” 

The pair then came across the YouTube page of a Bitcoin miner who heated his backyard pool with a Bitcoin mining operation. Miners run complex equations on computers in order to find new Bitcoin, and this manic activity generates a massive amount of heat that needs to be cooled to stop from overheating, often with fans. But a scant few miners around the country were instead capturing the heat from the computers via a heat exchanger and a pump, and then channeling it toward keeping their pools warm.

Bitcoin

Goodman and Talmadge were inspired to attempt the same method. Bathhouse now has 12 ASIC computers (a type of computer specializing in mining) running in Brooklyn and 20 ASICs in Manhattan, for a total of 5200 terahash (less than 1/100th the power of many industrial size Bitcoin mining rigs). The company is also currently planning an expansion that would triple the size of the Bitcoin operation at the Brooklyn location. 

Read More: Inside the Health Crisis of a Texas Bitcoin Town

Goodman says that Bathhouse’s electricity bills are more or less the same as before: around $20,000 a month in Brooklyn and $40,000 in Manhattan. Their Bitcoin initiative also came with the hefty upfront costs of buying ASICs and other equipment. But Goodman says that their mining operation is more energy efficient than electric heaters and earned the company 1.5 Bitcoin last year: about $90,000 in today’s prices. Goodman plans to hold onto the Bitcoin they earn rather than using it to pay for operating expenses, betting that its price will increase in the long run.

“If the price of Bitcoin tanked and went to zero, and then we would have a bunch of equipment that would be really pointless, and we would definitely be rethinking what we’re doing,” he says. “We are doing it because the economics makes sense in today’s world.” 

Goodman’s commitment to Bitcoin is evident from the moment one walks into the Manhattan location: copies of the book “The Bitcoin Standard” by the anonymous author Saifedean Ammous sit on a central shelf in the lobby, flanked by soaps and bathrobes. Polls show that Bitcoin remains unpopular among large swaths of the American population, but Goodman says the backlash they’ve received has been minimal. “We’ve had a few detractors, but the vast majority of our customers don’t don’t care either way. They don’t sit in a pool and wonder how it’s heated,” he says. 

Goodman also stresses that the point of the mining rigs isn’t to maximize profitability. In fact, the miners go to sleep whenever the pools reach their desired temperature, which means that Goodman is theoretically leaving Bitcoin on the table. “Bitcoin mining is not really the business I want to be in,” he says. “We’re doing it as an efficiency move. We’re trying to have the happiest customers and the most awesome tech.” 

Other pools powered by data centers

A massive, global boom in data centers has taken place recently, brought on in part by the rise of Bitcoin mining and the explosion of the AI industry. Environmentalists worry that this rise could bring countless negative effects: energy costs for consumers will increase; more fossil fuels will be burned; and climate goals will be cast to the wayside. 

Read More: How AI Is Fueling a Boom in Data Centers and Energy Demand

In response, some data center industry players have been working to channel the heat from their operations into more productive uses. In Paris, a data center is turning its hot air waste into water and piping into a local energy system, routing to buildings including the Olympic Aquatics Center. The mayor of the Paris suburb Seine-Saint-Denis claims that using the data center as an energy source will spare the region 1,800 metric tons of CO2 emissions per year. 

A British startup, Deep Green, has also been working to provide data centers to hundreds of pools, which were previously heated with water boilers. The startup has advertised that they can install cyclical systems in which cold water from pools is used to cool servers, which heat up and then send that energy back to the pool. “Our data centers are highly energy efficient and support local communities with free heat,” Deep Green’s founder and CEO Mark Bjornsgaard told The Next Web earlier this year. 

Industry players and government officials hope that these sorts of solutions could scale upwards, and help the European Union meet ambitious environmental targets, including reducing emissions by 55% by 2030.

Projects capturing and reusing heat for homes, offices or universities have sprung up across the region. But data-center heat redistribution remains a niche market, with companies facing costs and challenges in distributing the heat. 

Fisher, of the Sierra Club, likened these efforts to greenwashing, a practice in which companies make deceptive claims to appear more environmentally friendly to consumers. “Rather than heating swimming pools, what we really need is transparency in an industry that has a growing impact on the electric grid, the environment, and public health,” he wrote. 

And Sasha Luccioni, an AI researcher and climate lead at the AI platform Hugging Face, says that while these types of solutions could have a positive impact, “they feel like trying to mitigate the downstream aspects instead of making AI less research intensive.” 

“These initiatives are definitely good, but to what extent is it going to be something that’s fast or big enough to make a difference?”

Andrew Chow is the author of Cryptomania, a book about the rise and fall of Sam Bankman-Fried and cryptocurrency during the pandemic. 

Why the Arrest of Telegram’s Pavel Durov Is Sparking Outrage

Durov

The arrest of a tech CEO has reignited fierce global debates about the limits of digital freedom of speech, and how much responsibility social media companies should bear over the content on their platforms.  

On August 24, Pavel Durov, CEO of the messaging app Telegram, was arrested at a Paris airport as part of a larger investigation by French authorities into criminal activity on the platform. In a press release, a French prosecutor wrote that Telegram had refused to cooperate with authorities in their efforts to stop the spread of child porn, drugs, and money laundering on the platform. (French President Emmanuel Macron denied that the arrest was politically motivated.) 

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But the arrest also sparked backlash from some users, who decried what they considered to be governmental overreach and censorship. Edward Snowden called the arrest an “assault on the basic human rights of speech and association.”

On Aug. 28, Pavel was formally charged with an array of crimes connected to illicit activity on the app. In a statement a prosecutor said that he was released on a $5.5 million bail but must stay in the country—and that if convicted, he could face up to 10 years in prison.

Here’s what to know about Telegram, and the implications of Durov’s arrest. 

Telegram’s emphasis on freedom of speech

Durov, 39, was born in Russia and founded Telegram in 2013. The project stemmed from his deep anti-regulation bent and belief that people in countries with oppressive governments needed an encrypted messaging system to communicate with each other. Durov’s comments drew the ire of the Russian government, and he fled the country in 2014. 

Telegram allows users to chat privately and in groups, or to subscribe to public channels that disseminate information. Durov positioned Telegram as a haven for free and secure speech. While experts have since questioned how secure most conversations on the platform are, Telegram now has more than 900 million users across the world. In some places, the app has fueled protest movements against authoritarian regimes, including in Iran and Hong Kong. The app has also made Durov, who now lives in Dubai, a billionaire.

But with its lack of moderation, Telegram has also allowed far-right extremists, including ISIS and the Proud Boys, to communicate and recruit, as it has allowed the groups to protect their anonymity and evade law enforcement in a way that Facebook, Twitter and YouTube has not. Durov actually embraced this type of usership: “I think that privacy, ultimately, and our right for privacy, is more important than our fear of bad things happening, like terrorism,” he said at a 2015 TechCrunch event, adding that he “shouldn’t feel guilty” about ISIS using Telegram. (A few months later, though, Telegram announced it had blocked dozens of ISIS-related channels.)

In the decade since, hate groups have flourished on Telegram. The British advocacy group Hope not Hate wrote in 2021 that Telegram was home to “the most extreme, genocidal and directly violent antisemitic content.” In 2023, Brazil temporarily banned the platform during investigations into neo-Nazi groups allegedly using the app to conduct school attacks. Law enforcement officials say that American far-right extremists have recently been using Telegram to plan attacks on local power infrastructure. 

And because Telegram has no explicit policies against the sharing of child sexual abuse videos in private messages, sellers of such videos have found a home on the platform, according to researchers. The Stanford Internet Observatory stated that Telegram failed “to perform even basic content enforcement on public channels,” thus allowing child porn to spread. 

Backlash from First Amendment defenders

For several years, the European Union—which has some of the strictest content policies in the world—has been trying to wrangle Telegram and its large European user base into cooperation with its rules. In 2022, the EU adopted the Digital Services Act, forcing Telegram to comply with its transparency and moderation standards, including taking proactive steps to police harmful and illegal content

Ultimately, it was the French government which decided to move against Durov, arresting him and accusing him of complicity in a range of criminal acts. Telegram responded in a statement by asserting that the company abides by EU laws and that Durov “has nothing to hide.” A spokesperson for the European Commission told Euronews that Durov’s arrest did not relate to any sort of breach of the Digital Services Act. 

Despite the gravity of these charges—and the documented amount of illegal material shared on Telegram—Durov’s arrest sparked fierce outrage from many on social media, particularly from libertarian-leaning figures who accused the French government of trying to pry into private conversations. 

Elon Musk wrote “#FreePavel” on X, and warned that the arrest could start a slippery slope leading to “being executed for liking a meme.” Vitalik Buterin, the founder of the blockchain Ethereum, wrote that “This looks very bad and worrying for the future of software and comms freedom in Europe.” Many others on social media worried that the arrest would embolden governments to prosecute tech CEOs for failing to turn over user data—or that it would lead to a “chilling effect” in which platforms over-moderate content for fear of being criminally charged. 

“Holding platforms liable for user speech incentivizes them to err on the side of caution by removing any content that could conceivably lead to legal trouble, even if it’s lawful,” Aaron Terr, the director of public advocacy for the Foundation for Individual Rights and Expression (FIRE), wrote to TIME in an email. “That chilling effect is why the United States has constitutional and statutory protections that ensure platforms can host a wide range of ideas without facing crippling legal consequences.” 

Durov’s arrest also sparked alarm in Russia, where half of the country’s citizens use Telegram to obtain information or communicate with others, according to a recent poll. The Russian military uses Telegram to coordinate actions and share documents. And a 2023 WIRED investigation raised the possibility that the Kremlin was using Telegram to spy on dissidents. After Durov’s arrest, Russian media sources voiced concern that the app might “become a tool of NATO,” and called for the creation of an alternative military messaging system. 

Read More: How Telegram Became the Digital Battlefield in the Russia-Ukraine War

The strange confluence of these different groups expressing support for Durov did not go unnoticed by experts. “I do think it’s interesting that the outrage comes from adversarial quarters,” says Elina Treyger, a senior political scientist at the Rand Corporation. “It’s both the Kremlin and its opponents that are troubled by it, plus the free speech absolutists: This is not a coalition you see often.” 

But other free speech champions argued that it would be wrong to extrapolate too much from Durov’s arrest. Daphne Keller, an expert on platform regulation at the Stanford Cyber Policy Center, noted on LinkedIn that while she typically criticizes lawmakers for overregulation, Durov’s case seemed at first glance like a simple matter of him breaking the law. “CSAM [child sexual abuse material], terrorist content, and drug sales are all regulated by federal criminal law,” she wrote. “Platforms have no immunity from that law.” 

Durov has been released on bail, but must check in at a police station twice a week, according to the prosecutor’s statement. Cases in the French criminal system can take years to resolve.

‘More Veep Than West Wing:’ Inside Sam Bankman-Fried’s Attempted Conquest of Washington

This essay is an excerpt from Cryptomania, the newly released book from TIME technology correspondent Andrew R. Chow, which chronicles the pandemic-era rise and fall of crypto, and of mogul Sam Bankman-Fried.

In 2022, it was hard to walk around Washington without seeing Sam Bankman-Fried’s face. While the press often praised him for his humility, the founder and CEO of the crypto exchange FTX plastered ads of himself all over the city, and particularly in areas where congressional staffers might walk to work, like Union Station. Although Sam still lived in the Bahamas in order to avoid regulation, he was shuttling from Nassau to Washington, D.C., every week or two to meet with lawmakers and regulators, making a power play for the nation’s capital. 

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After FTX’s crash, theories would fly about Sam’s larger designs on Washington. Some speculated that he had been angling to move FTX back to U.S. soil and carve out concessions to make it the top crypto company in the country. Others believed he was laying the groundwork for a political career himself. A less charitable theory was that he hoped to pre-emptively seek federal leniency for the illegal activity he knew he was already committing.

Whatever Sam’s long-term goals were, he made his short-term aims plenty evident: he stumped for a friendlier regulatory climate for crypto companies in the U.S., so that he could sell more crypto products to Americans. Getting favorable legislation seemed feasible in 2022, given how much national excitement there was about crypto—and how little lawmakers actually understood it.

Sam’s approach to Washington was two-pronged. The first was a charm offensive, involving high-profile hearing appearances and closed-door meetings with members of Congress and regulatory officials. The second was a donations blitzkrieg for crypto-friendly candidates, which was led by Sam’s younger brother Gabe. Sam’s money and sudden omnipresence in Washington sent shock waves through the Democratic Party establishment. “Washington is a place where the power structure is more or less set,” says a former member of the Treasury Department. “And Sam disrupted it.”

Read More: The Bombshell Evidence That Led to Sam Bankman-Fried’s Conviction

Sam testified in front of Congress multiple times, with his first appearance in December 2021. At this point, around $15 billion in assets were traded daily on FTX, and its market share was rapidly growing. Sam used his testimony to argue both that crypto improved upon traditional finance, and that FTX improved upon crypto. He criticized the way that the 2008 financial crisis had been precipitated by “bilateral bespoke nonreported transactions” piled up onto each other, lacing the entire financial system with hidden risk. FTX, in contrast, boasted a “risk -engine”: a suite of automated tools to minimize unforeseen losses and weed out bad actors in the system, Sam claimed. He added that if too many customers made bad bets, FTX had a $250 million insurance fund to absorb customer losses. FTX’s financial cushion and its cutting-edge technology, he argued, would “ensure a customer without losses can redeem its assets from the platform on demand.”

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Many lawmakers found his speeches persuasive. “It sounds like you’re doing a lot to make sure there is no fraud or other manipulation,” Representative Tom Emmer, who was elected as the GOP’s majority whip in 2022, told him at the December 2021 hearing. 

“There were a lot of stars in people’s eyes watching that: folks on both the Democratic and Republican sides that were very taken with SBF,” says congressional staffer Devina Khanna.

But virtually none of the above descriptions about Sam’s business, which he made under oath, were true. While he attempted to portray FTX as the opposite of the shadow banks of the 2000s, he was mirroring their actions by leveraging and repackaging dubious and risky assets. Although FTX’s risk engine was innovative and mostly effective, Sam knew that a single account was exempt from ever getting auto-liquidated: his own trading firm, Alameda Research. That team, which was run by Sam’s on-and-off girlfriend Caroline Ellison, could take a virtually unlimited line of credit from FTX without getting flagged for internal review, and use it to make bigger and bigger trades. At this point, Alameda was already secretly borrowing billions from FTX’s pool of money. The insurance fund that Sam advertised was fake too. While the FTX website stated at the time that the platform had $250 million stashed away for a rainy day, that number was completely made up, and generated by a bit of code.

As Sam stumped in front of Senators, he enlisted his younger brother Gabe to help bring new crypto-friendly faces to Congress’s halls. The brothers spun up a nonprofit called Guarding Against Pandemics and an affiliated super PAC called Protect Our Future. Sam quickly funneled $27 million to the PAC, whose ostensible goal was to promote candidates who prioritized anti-pandemic research and prevention. “He thought it was very effective, that you could get very high returns in terms of influence by spending relatively small amounts of money,” Ellison, who later pled guilty to fraud charges, testified about Sam’s fundraising.

At first, Protect Our Future did support candidates who seemed equipped to guard against future pandemics. But D.C. insiders say that late in the campaign cycle, a clear pattern emerged of the Bankman-Frieds’ donating based not on ideology, but on likelihood of victory. “They switched to ‘We’ll give $500,000 to anyone who already has this locked up—that way, they’ll be forever in our debt,’” a D.C. operative tells me. “There was no ideological consistency to who they gave money to in the last four to five months. It was a lot more silly than strategic: more Veep than West Wing.

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Sam ended the 2022 election cycle as the third biggest individual public Democratic donor of the midterms, trailing only Michael Bloomberg and George Soros. But he was secretly funding Republicans too. “We will be heavily putting money to weed out anti-crypto dems for pro-crypto dems and anti-crypto repubs for pro-crypto repubs,” Ryan Salame, an FTX executive and one of Sam’s closest allies in the Bahamas, wrote to a confidant in a text. 

FTX’s financial-influence campaign largely unfolded over a Signal group chat. Sam was on the chat, as was FTX’s top engineer Nishad Singh, who fronted $14 million in donations to Democrats—even though he grumbled in messages about having to support “explicitly-woke stuff” like the LGBT Victory Fund. Salame, in turn, flowed more than $23 million to Republicans in 2022, including the maximum to Tom Emmer. (FTX also doled out $200,000 to New York Republican Michelle Bond, a Donald Trump Jr.–endorsed congressional candidate who happened to be Salame’s girlfriend.) Financial-forensics experts would later trace much of the money for political donations—ostensibly given by Singh and Salame—back to Alameda bank accounts, and then back to transfers pulled from FTX customer deposits.

Sam was playing both sides: a logical end point to his nihilist approach. The ideological principles of the candidates he gave money to didn’t matter. All that mattered was that he continued to amass power himself. Many other crypto executives saw Sam’s successes in Washington and followed his lead: more than $26 million flowed from crypto companies to political races in 2021 and the first quarter of 2022, outpacing spending from Big Pharma, Big Tech, and the defense industry.

All in all, an astounding 196 members of Congress—more than a third of all Senators and Representatives—received cash from Sam Bankman-Fried or other senior executives at FTX. And Sam announced that he had only scratched the surface of his largesse: that he was aiming for a $1 billion “soft ceiling” for the 2024 election. 

A new kingmaker had arrived in Washington, it seemed. But by the end of the year, Sam Bankman-Fried would be in handcuffs. 

Could a Crypto App Be the Answer for Struggling Restaurants?

blackbird

Since the pandemic upended dining habits, full-service restaurants have struggled to bring people back to their tables. Last year, about 4,500 more independent restaurants closed than opened, suffering from rising costs, shrinking margins, and an increasing preference from consumers for fast-food or delivery. 

Ben Leventhal, the co-founder of Eater and Resy, is currently building a platform with the goal of reversing this trend: a loyalty app called Blackbird, which he hopes will make restaurants more connected to each other and to their customers. Crucially, Blackbird is unique as a consumer app in that it relies on crypto. When users check into a restaurant in the app, they earn a cryptocurrency called $FLY. Leventhal hopes that restaurants will accept $FLY as a form of payment, creating a network effect in which an ever-growing pool of money is circulated among restaurants. 

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And on July 30, Blackbird announced a payment processing system called Blackbird Pay, which allows diners to pay for their meal directly inside of the Blackbird app, at any time during their meal, with a credit card or a crypto. “Compared to old legacy systems, Blackbird Pay is massively streamlined, and we think it’s kind of magical for consumers,” Leventhal says.

Crypto evangelists have held up Blackbird as a paragon for mainstream crypto adoption and a case study for how crypto might soon be implemented into many facets of life. But so far, restaurants have been leery of adopting the crypto aspect of the app, meaning that diners have struggled to find ways to even spend the points they have earned. And Leventhal himself has de-emphasized the app’s crypto nature in favor of a more holistic vision for the company. The current state of Blackbird exemplifies both the promise of crypto and its rocky rollout thus far in public life. 

“So far, there’s no indication that we’ve seen that leading with crypto is the right answer,” Leventhal tells TIME. “The broader idea and opportunity is to create a system and a currency that has tremendous value in the eyes of consumers—and to use that currency to start to change consumer behavior in ways that benefit the restaurant industry.” 

Collecting customer data, building customer loyalty 

Blackbird began operating in April 2023 and is currently available in over 150 restaurants, mostly in New York, with a handful in Charleston and imminently, San Francisco. The company raised $24 million in funding in the fall, led by the crypto powerhouse venture fund a16z. When a user downloads the free app, they can scroll across a map of participating restaurants and message the restaurant for a reservation. When they physically check into a restaurant, that business can then see their dining history. Leventhal argues that the more that consumers and restaurants know about each other, the better the experience is for both sides. 

“Restaurants don’t have data and information to allow them to have a sophisticated marketing strategy for retention, loyalty and connectivity,” he says. 

The “check-in” feature of Blackbird appealed to Roni Mazumdar, a restaurateur who runs five full-service restaurants in New York, including Dhamaka and Adda. He joined Blackbird a few months ago. “In the past, we would have to remember guests in some shape or form or look at a counter that existed on Resy, and then figure out how we want to take care of this guest who might have been here 52 times in two years,” Mazumdar says. “When you understand what kind of loyalty one has toward you, based off of them coming in and quickly scanning, that to me is like the coolest feature ever.” 

Billy Van Dolsen, the owner of the restaurant Sereneco in Brooklyn, also signed up for Blackbird earlier this year, and says that he gets a “handful” of check-ins from Blackbird a day. “Restaurants can be run pretty loose, especially with things like customer loyalty and building regulars. But having systems in place has helped us,” he says. The fourth time that a patron checks into Senereco on Blackbird, for instance, they automatically get a free appetizer. 

Restaurants generally pay $89 a month to use Blackbird. Many owners are excited about the newfound ease with which Blackbird allows them to track repeat customers. (Blackbird says that diner information is kept on the company’s databases, and “limited and governed by local privacy regulations and requirements.”) Blackbird could also enable restaurants to prioritize their most valuable tables for regulars, who they know might tip well or order a bottle of wine. 

But some restaurants are less excited about $FLY, the optional crypto element. Diners accrue the currency from going to restaurants in a similar mechanism to earning airline miles, but $FLY, which operates on Coinbase’s blockchain Base, cannot be redeemed for actual cash. 

Van Dolsen is considering allowing customers to buy merch with the $FLY they’ve accumulated, but is hesitant to allow them to use it to pay for their meals. “As an operator, that’s not something I’d be excited about: If they’re a regular at a different place, and this is their first time here, and they’re just using their points here,” he says. “They’re loyal to the Blackbird network, but that doesn’t help my business, necessarily.” 

Leventhal acknowledges he’s heard this feedback from restaurant operators. “I’ve built my career on believing each individual restaurant knows what’s best for itself. If you’re an independent restaurant and you want to go it alone, god bless: We wish you the best,” he says. “But we don’t think that’s the right answer—and that small, independent restaurants that behave as islands are ultimately at extremely high risk for closing because they’re not making any use of the network that exists around them.” 

Mazumdar enables check-ins, but not the use of $FLY at his restaurants, though he says he’s excited to do so down the line because of the potential payoff. “I don’t look at a transaction as a one-off. I think there will be some give and take,” he says. “For the most part, you’re creating a serious pool of people that can come back and build a longer term relationship.”

FOODi: The Future Of Food & Business In Cooperation With Bloomberg LP And Resy - Food Network & Cooking Channel New York City Wine & Food Festival presented By FOOD & WINE

Crypto fanatics embrace Blackbird

Some of Blackbird’s first wave of users are not fine dining experts but rather members of the crypto industry, who are incentivized to support projects that could uplift the entire ecosystem. While other crypto apps have previously shown promise—including the fitness app Stepn and social media platform Farcaster—most have not been able sustain their success or reach widespread adoption. 

One of Blackbird’s early adopters is Jay Yu, a 22-year-old Stanford student who runs the college’s blockchain club. Yu has a summer internship in New York and has checked into Blackbird restaurants over 20 times. “I’ve used consumer crypto apps in the past that are supposedly new innovations, but to me, they didn’t seem like a big leap forward,” he says. “Blackbird is definitely a leap forward in terms of crypto user experience and tying some of this technology to real world stuff.”

“Yu has already benefited from Blackbird’s perks, including free drinks and desserts from checking into the same restaurant multiple times. But while Yu has accrued over 17,000 $FLY from his activity on Blackbird, which amounts to about $170, he hasn’t yet found a restaurant in his searches on the app that will accept it as payment. So he’s still sitting on his stash. “The restaurants themselves seem to be a little bit confused as to what these $FLY points actually are and represent,” he says.

A similar rewards program has been tried before: Starbucks Odyssey, a self-proclaimed “revolutionary Web3 experience” in which users earned perks for buying coffee and completing online games. At its peak, aggressive crypto traders bought and sold Starbucks NFTs for thousands of dollars each. But Starbucks shuttered the program in March.  

Read More: Why Starbucks NFTs Are Being Sold for Thousands of Dollars

Yu has also been unsuccessful in his attempt to use Blackbird Pay, the new payment processing system that the company has been quietly testing in a few select restaurants. Leventhal says that Blackbird Pay could ease one of the most annoying parts of dining: waiting for the check. 

But Yu says that his several attempts at trying to pay his bill with Blackbird Pay were riddled with confusion and ultimately failed. “Maybe the restaurant owner knows what to do with it, but the actual server that’s waiting on the table has no idea what this is,” he says. “Some of these disconnects need to be ironed out.” 

Blackbird Pay is incentivizing restaurants to make this transition by offering lower payment processing fees. While typical credit card fees can be as high as 3.75%, Blackbird charges a flat 2% for restaurants to use the Blackbird Pay network. 

While this incentive interests restaurants, it does mean that Blackbird is taking a loss every time they have to process a premium credit card. When asked about the sustainability of this model, Leventhal responded: “Processing fees are a moving target, but they are consistently a major expense for restaurants. Of course we are shouldering some costs for our restaurant partners. That is one way that we’re investing in the future of restaurants.”

Blackbird’s ambivalent relationship with crypto

All of these factors mean that Blackbird currently has a multifaceted relationship with the crypto world. Leventhal believes that crypto and blockchain technology can offer a uniquely powerful solution for binding restaurants and diners together. Crypto fanatics want to spend cryptocurrency with Blackbird as something of a justification for continued investment in their industry. But most restaurants don’t want to deal with crypto at all—and some casual prospective diners carry an inherent distrust of crypto projects.

While Van Dolsen says that he’s not sure how the crypto aspect of Blackbird will work, he has faith in Leventhal to figure it out, given his track record. “When Ben built Resy, it was a customized restaurant-focused product that was better for us, at a lower price point,” he says. “I think they’re trying to do something similar here: There’s an opportunity to build a network, understand who their regulars are, and connect more directly.”

Time will tell if Blackbird can become the ambitious one-stop shop that Leventhal envisions: a restaurant discovery app, payments system, and loyalty program all in one. Doing so requires winning over the many restaurants and diners who want nothing to do with crypto at all. If restaurants don’t choose to accept $FLY, then Blackbird’s value to the restaurant ecosystem could be limited.

“There are certainly bleeding-edge crypto adopters that are here for the crypto. But they don’t represent the scale base of customers for Blackbird,” Leventhal says. “Our job is to build something magical from a consumer tech standpoint. Where we can use the blockchain to create that magic, we will. But we will never force crypto to the consumer.” 

Why Colin Kaepernick Is Starting an AI Company

Colin Kaepernick

When NFL quarterback Colin Kaepernick began kneeling during the national anthem to protest police brutality and racial injustice in 2016, he soon found himself out of a job, eventually moving onto other ventures in media and entertainment. Today, he’s entering the AI industry by launching a project he says he hopes will allow others to bypass “gatekeeping:” an artificial intelligence platform called Lumi.

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The new subscription-based platform aims to provide tools for storytellers to create, illustrate, publish and monetize their ideas. The company has raised $4 million in funding led by Alexis Ohanian’s Seven Seven Six, and its product went live today, July 24.

In an interview with TIME, Kaepernick says this project can be viewed as an extension of his activism. “The majority of the world’s stories never come to life. Most people don’t have access or inroads to publishers or platforms—or they may have a gap in their skillset that’s a barrier for them to be able to create,” he says. “We’re going to see a whole new world of stories and perspectives.”

Kaepernick says that the idea for Lumi came out of challenges he faced while building his media company, Ra Vision Media, and his publishing company, Kaepernick Publishing, which included “long production timelines, high costs, and creators not having ownership over the work they create,” he says. When ChatGPT, Dall-E, and other AI models broke through to the mainstream a couple years ago, Kaepernick started playing with the tools, even trying to use them to create a children’s book. (Kaepernick penned a graphic novel, Change the Game, based on his high school experiences, last year.)

Lumi aims to help independent creators forge hybrid written-illustrated stories, like comics, graphic novels, and manga. The platform is built “on top of foundational models,” Kaepernick says—although he declined to say which ones. (Foundational models are large, multi-purpose machine learning models like Chat-GPT.) Users interact with a chatbot to create a character, flesh out their backstory and traits, and build a narrative. Then they use an image-generation tool to illustrate the character and their journey. “You can go back and forth with your AI companion and test ideas, ‘I want to change the ending,’ or ‘I want it to be more comedic or dramatic,’” he says. 

The users can then publish and distribute their stories right on the Lumi platform, order physical copies, and use AI tools to create and sell merchandise based on their IP. Kaepernick hopes that the platform will appeal to aspiring creators with gaps in their skill sets—whether that means athletes who have a story and an audience but lack illustrating chops, or content creators who are having trouble monetizing their work.

“We talked to hundreds of creators and asked what their pain points were,” he says. “Some were trying to fundraise money to get projects off the ground. Others don’t know how to actually enter the space, or don’t have a pathway or have been rejected. And other creators didn’t want to handle the logistics of fundraising and manufacturing and project management and distribution. We hope that this creates a path for people to actually thrive off of the creativity that they’re bringing to the world.” 

Read More: Colin Kaepernick, TIME Person of the Year 2017, The Short List

Lumi will give creators full ownership of the works they create on the platform, Kaepernick says. When asked about how the company might deal with works that are created on Lumi but are alleged to have infringed on pre-existing copyrights, Kaepernick responded: “We’re going to build on the foundational models, and we’re going to let the legislators and everybody figure out what the laws and parameters are going to be.”

Kaepernick is well aware that there is significant mistrust and criticisms within creative industries about the rise of AI and its potential to take away jobs. Spike Lee, for instance, who signed on to direct an upcoming documentary about Kaepernick, said in a February interview that “the danger that AI could do to cinemas is nothing compared to what it could do to the world.” Concerns about AI were also at the center of the Hollywood strikes last year. 

“I understand the concerns,” Kaepernick says. “The creators have to be in the driver’s seat. This is another tool for them to be able to hopefully create in a better, more effective way, and that gives them freedom to create stories that they wanted to but couldn’t before.” Kaepernick compares these new AI tools to the iPhone’s impact on allowing a much larger swath of people to experiment with photography. “We saw a whole new world of photography and photos,” he adds. “But that didn’t eliminate traditional photographers or their craft and expertise. We look at this in a similar way.”

Kaepernick’s team includes engineers formerly at Apple (Stefan Dasbach) and Reflex AI (Sam Fazel). A representative for Lumi declined to disclose the monthly price of the platform. Creators can begin signing up for the beta version on July 24.

Silicon Valley Leaders Have Taken to Donald Trump. Could Kamala Harris Win Them Over?

Kamala Harris

The deep-pocketed tech industry of Silicon Valley has historically voted for Democrats. But in the last month, a cadre of tech executives has risen up for Donald Trump, both on the grounds that he will be friendlier to the industry and that President Joe Biden was unfit to serve a second term. 

But now that Biden has dropped out of the race and the Democratic Party seems to be coalescing around Kamala Harris, a battle for Silicon Valley’s affection—and donations—could ensue. Harris is from Oakland, and many people perceived her tenure as California’s attorney general as favorable toward the tech industry. Now Silicon Valley appears to be split—and debates will play out both on social media and in tech offices for the months to come. 

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Trump is backed by Elon, other major tech leaders

It would take a seismic shift for Silicon Valley to actually turn red. In 2020, Santa Clara County, which contains most of Silicon Valley, voted 73 percent for Biden and 25 percent for Trump. (The 2016 numbers were very similar.)And a recent WIRED analysis of campaign contributions found that the venture industry seems to actually be donating to Democrats at a higher rate this cycle than in years past. 

But some of the most influential voices in tech have loudly thrown their lot in with Trump, especially since his assassination attempt. Elon Musk and his associate David Sacks have been active on social media in rallying support among tech executives and have been pumping millions into a Super PAC for Trump’s campaign. 

The crypto industry, in particular, has embraced Trump, who is scheduled to speak at a Bitcoin conference this weekend. Marc Andreessen, the co-founder of the prominent VC firm a16z, has denounced the Biden administration’s more aggressive approach to tech and crypto regulation, and said that he is backing Trump after supporting Democrats through most election cycles, including in 2016.

And many tech moguls have been further energized by Trump’s vice presidential pick of J.D Vance, who has deep Silicon Valley ties, including working for Peter Thiel. Sacks and the tech investor Chamath Palihapitiya even personally lobbied Trump to pick Vance at a $300,000-a-person dinner, the New York Times reported

Read More: ​​How the Crypto World Learned to Love Donald Trump, J.D. Vance, and Project 2025

But Harris has a long history with Silicon Valley

But Harris’s history with Silicon Valley could stem the tide. In recent months, many Silicon Valley Democrats sat on the sidelines as Biden’s campaign lost steam: the entrepreneur and venture capitalist Reid Hoffman told WIRED that tech mega-donors had been withholding their donations due to the “turmoil.” But Hoffman sprang back into action following Biden’s exit, calling Harris “the right person at the right time.” Many others immediately joined him: Harris raised over $50 million in less than 24 hours after Biden’s announcement. 

Hoffman is one of many Silicon Valley powerhouses who supported Harris during her 2020 presidential campaign, due to her connections with the industry stemming from her time as California’s attorney general. Her campaign donors included Salesforce co-founder and CEO Marc Benioff, who donated in 2019 (Marc, with Lynne Benioff, is the owner and co-chair of TIME), Amazon general counsel David Zapolsky, and Microsoft president Brad Smith.

Some observers, in turn, argued that Harris was too favorable to the industry while attorney general. Her time as AG was marked by a mass consolidation in tech towards a few hyper-power companies, which critics argue she did little to stop. In 2012, she forged an agreement with Big Tech titans over privacy protections for smartphone owners, which was largely cheered by the industry. The following year, she participated in the marketing campaign for Sheryl Sandberg’s Lean In while being the law enforcement official responsible for overseeing Facebook. 

In contrast, she did wield her position to take an active role in pressuring platforms to ban revenge pornography. And the Biden administration has actually been marked by a hostile relationship with Big Tech, with Biden appointee Lina Khan attempting to use her position at the FTC to break up monopolies. (In a strange twist, J.D. Vance has expressed approval of Khan’s efforts to rein in Big Tech.) Given this trajectory, it’s unclear how friendly Harris will be to the tech industry if she were to assume power. 

“Kamala Harris built very close ties to the California-centric Big Tech industry, but much has changed in the last four years,” says Jeff Hauser, the executive director of the Revolving Door Project. “So it’ll be a question of: was she deeply committed to Big Tech, or was that just kind of like, a home state Senator with a home state industry taking the easy way out?” 

Some tech execs want an open convention

Then there are those in tech leadership who want to support a Democratic candidate, but are calling for the Democrats to select someone who might have a wider appeal to their industry. Aaron Levie, the CEO of Box, wrote on X that following Biden stepping down, the Democrats could gain votes by becoming the party that is “wildly pro tech, trade, entrepreneurship, immigration, AI.”

Reed Hastings, the executive chairman of Netflix, wrote on X that Democratic delegates “need to pick a swing state winner.” The venture capitalist Vinod Khosla agreed—and said that although he believed Harris could beat Trump, he called for an open convention. “I want an open process at the convention and not a coronation,” he wrote. “The key still is who can best beat Trump above all other priorities.”

How the Crypto World Learned to Love Donald Trump, J.D. Vance, and Project 2025

Trump Vance

When the pandemic hit in 2020, the DJ and personal trainer Jonnie King stopped getting booked for gigs and workout sessions. So he turned to trading crypto, which was rapidly increasing in value at the time. “I was like, ‘Oh my god, there’s hope for me. I can make money while stuck at home,’” he says. 

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Four years later, King is a devout believer who keeps most of his assets in cryptocurrencies. And although he voted for Bernie Sanders in 2016—due to Sanders’ focus on uplifting the working class—King is now a vocal supporter of Donald Trump, due to Trump’s own recent embrace of crypto.

“I can probably say it’s a single vote issue for me, because that’s my livelihood,” King tells TIME. “Crypto is how I save my wealth, and if [the Democrats] are trying to attack that, that’s literally taking my money away from me. How am I supposed to support my family?” 

King exemplifies a growing faction from within the cryptocurrency community supporting Trump with open arms. For years, both during his presidency and after, Trump expressed distrust in crypto. In 2021 he went as far as to say that Bitcoin seemed like a scam. But leading up to the 2024 election, Trump has done an about-face and lavished praise onto the technology. And in just the last week, he took several more significant steps to win over the crypto faithful: he announced an appearance at a Bitcoin conference in Nashville on July 27, a new NFT project, and chose a staunchly pro-crypto vice-presidential candidate in J.D. Vance. 

The crypto world has returned the enthusiasm. Despite any misgivings they may have with other parts of Trump’s platform or criminal convictions, many believe he will provide a significant boon for the industry should be elected. The crypto community on X, formerly known as Twitter, is filled with pro-Trump sentiment, and crypto money is pouring into Trump’s campaign. And in the aftermath of Trump’s shooting, Bitcoin shot up in price, seemingly based on the belief that the event helped Trump’s chances of being elected. 

“Trump has had an incredible and surprisingly positive impact on this space,” Kristin Smith, the CEO of the crypto lobbying group The Blockchain Association, tells TIME. “That was not on my 2024 bingo card.” 

Trump’s crypto U-turn

Trump hasn’t gone into much detail about his newfound love for crypto after criticizing it for so many years. But he has used the industry as a wedge issue, directly contrasting himself with leftist crypto skeptics like Elizabeth Warren. And because the crypto lobby is well-organized and flush with money, it offers Trump a whole lot of potential cash.

Trump has attended several fundraisers full of cryptocurrency executives, who promised to throw him more fundraisers, according to The Washington Post. Crypto moguls Tyler and Cameron Winklevoss each donated $1 million in Bitcoin to Trump, criticizing Biden’s “war against crypto,” and Trump discussed crypto policy with pro-crypto entrepreneur Elon Musk, according to Bloomberg. (Musk has since endorsed Trump.) The price tag of attending a “VIP reception” with Trump at the upcoming Bitcoin conference is a cool $844,600 per person.

When Trump announced his campaign would accept cryptocurrency donations, a statement on his website read that the decision was part of a larger fight against “socialistic government control” over the U.S. financial markets. (Joe Biden hasn’t said much publicly about crypto, but his administration has supported stricter policies designed to protect consumers.)

Read More: Why Donald Trump Is Betting on Crypto

And earlier this month, The Post reported that a Trump advisor added language about crypto to the Republican Party platform, which surprised longtime party members. Part of the passage read: “We will defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their digital assets and transact free from government surveillance and control.” (Government agencies currently use blockchain tracing to track crypto scammers and other criminals.)  

Read More: Inside the Health Crisis of a Texas Bitcoin Town

J.D. Vance, Trump’s VP pick, increases his crypto bona fides

On Monday, Trump further energized crypto fans by choosing the pro-crypto Senator J.D. Vance as his running mate. While running for Senate in 2021, Vance disclosed that he owned over $100,000 worth of Bitcoin. The same year, he called the crypto community “one of the few sectors of our economy where conservatives and other free thinkers can operate without pressure from the social justice mob.” Vance also received significant campaign funding from pro-crypto entrepreneur Peter Thiel. 

Earlier this year, Vance circulated draft legislation to overhaul crypto regulation and make clearer whether specific crypto tokens should be regulated by the SEC or the CFTC. Politico reported that the proposal seems to be “more industry-friendly” than previously-introduced bills. 

The crypto industry has largely cheered the idea of a personal holder of Bitcoin potentially entering the White House next year. “Senator Vance—an emerging voice for fit-for-purpose, pro-innovation crypto legislation—is an ideal candidate to lead the Republican Party’s crypto principles,” Kristin Smith wrote to TIME in an email. 

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Project 2025 also supports the crypto industry

Looming over the election is Project 2025, a far-reaching conservative blueprint led by the Heritage Foundation which spells out the policies that Trump should enact if he is elected, including launching mass deportations and countering “anti-white” discrimination. While Trump distanced himself from the proposal on Truth Social, dozens of Trump allies and former administration officials are connected to the project. 

The crypto industry is excited by crypto-related language in Project 2025. The document calls on the president to abolish the Federal Reserve (whose monetary policies have long been abhorred by crypto advocates) and move the U.S. to a free banking system, in which the dollar is backed by a valuable commodity like gold—or, crypto enthusiasts hope, Bitcoin itself. However, there’s been no indication that Trump or anyone in his administration has considered the idea. The document also calls on regulators to clarify rules around cryptocurrencies, just like Vance is pushing for, which could open the door for greater crypto adoption. 

Read More: What is Project 2025? 

Questions about Trump’s commitment to Bitcoin linger

Despite all this, there are crypto fans who are skeptical that Trump’s sudden embrace of Bitcoin will carry lasting weight beyond an election year talking point. Some of Trump’s avowed policy proposals, which have been described as authoritarian, seem to counteract Bitcoin’s anti-government, libertarian bent. For instance, his call for all Bitcoin mining to be located in the U.S. rubbed certain crypto idealists the wrong way, as decentralization and immunity to governmental pressures is a key part of the ethos of crypto mining.

Moe Vela, a former advisor to Biden and a senior advisor to the cryptocurrency project Unicoin, is skeptical of Trump’s intentions. “It was not long ago that he was bashing crypto,” he says. “The crypto community tends to be a bit inexperienced when it comes to legislation, policy and politics—and I encourage them to not fall prey to the pandering.”

Vela argues that “healthy and balanced” regulation of crypto is essential to the industry’s growth. “If we don’t have regulation that weeds out nefarious actors—and we’ve already seen we have our fair share of bad actors—that weakens trust and confidence in the sector,” he says.

And Vitalik Buterin, main founder of cryptocurrency Ethereum, wrote a blog post on June 17 cautioning crypto enthusiasts not to cast votes simply based on a candidate’s crypto position. “Making decisions in this way carries a high risk of going against the values that brought you into the crypto space in the first place,” he wrote.

Some polls suggest that crypto is still an extremely niche interest. The Federal Reserve found that just 7% of American adults used or held crypto in 2023, and another poll suggested that anti-crypto sentiment remains high. But the crypto industry is convinced that there could be thousands of single-issue crypto voters, like Jonnie King, who will lift Trump in the coming election. 

“Maybe it’s just a politician being a politician to win votes,” King says of Trump’s pro-crypto stance. “I’m not saying any man is perfect. But when Biden is campaigning a war against crypto, the one system that is hope for money, I see that as no way going forward. 

“If Trump can give us some hope—even if it’s just hope—it’s something.” 

‘We’re Living in a Nightmare:’ Inside the Health Crisis of a Texas Bitcoin Town

May 21st, 2024: Aerial view of Wolf Hollow Data Site in Granbury, Texas.

On an evening in December 2023, 43-year-old small business owner Sarah Rosenkranz collapsed in her home in Granbury, Texas and was rushed to the emergency room. Her heart pounded 200 beats per minute; her blood pressure spiked into hypertensive crisis; her skull throbbed. “It felt like my head was in a pressure vise being crushed,” she says. “That pain was worse than childbirth.”

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Rosenkranz’s migraine lasted for five days. Doctors gave her several rounds of IV medication and painkiller shots, but nothing seemed to knock down the pain, she says. This was odd, especially because local doctors were similarly vexed when Indigo, Rosenkranz’s 5-year-old daughter, was taken to urgent care earlier that year, screaming that she felt a “red beam behind her eardrums.”

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It didn’t occur to Sarah that these symptoms could be linked. But in January 2024, she walked into a town hall in Granbury and found a room full of people worn thin from strange, debilitating illnesses. A mother said her 8-year-old daughter was losing her hearing and fluids were leaking from her ears. Several women said they experienced fainting spells, including while driving on the highway. Others said they were wracked by debilitating vertigo and nausea, waking up in the middle of the night mid-vomit. 

None of them knew what, exactly, was causing these symptoms. But they all shared a singular grievance: a dull aural hum had crept into their lives, which growled or roared depending on the time of day, rattling their windows and rendering them unable to sleep. The hum, local law enforcement had learned, was emanating from a Bitcoin mining facility that had recently moved into the area—and was exceeding legal noise ordinances on a daily basis.

Over the course of several months in 2024, TIME spoke to more than 40 people in the Granbury area who reported a medical ailment that they believe is connected to the arrival of the Bitcoin mine: hypertension, heart palpitations, chest pain, vertigo, tinnitus, migraines, panic attacks. At least 10 people went to urgent care or the emergency room with these symptoms. The development of large-scale Bitcoin mines and data centers is quite new, and most of them are housed in extremely remote places. There have been no major medical studies on the impacts of living near one. But there is an increasing body of scientific studies linking prolonged exposure to noise pollution with cardiovascular damage. And one local doctor—ears, nose, and throat specialist Salim Bhaloo—says he sees patients with symptoms potentially stemming from the Bitcoin mine’s noise on an almost weekly basis.

May 20th, 2024: Cheryl Shadden’s homemade signs on her property across the street from the Wolf Hollow Data Site in Granbury, Texas.

“I’m sure it increases their cortisol and sugar levels, so you’re getting headaches, vertigo, and it snowballs from there,” Bhaloo says. “This thing is definitely causing a tremendous amount of stress. Everyone is just miserable about it.” 

Not all data centers make noise. And industry insiders say they have a technical fix for the ones that do, which involves replacing their facilities’ loud air fans with much quieter liquid-based cooling solutions. But some of their touted methods, including “immersion cooling” in oil, are expensive and untested on a large scale.

A representative for Marathon Digital Holdings, the company that owns the mine, did not answer questions about health impacts, but told TIME that it is working to remove the noisy fans from the site. “By the end of 2024, we intend to have replaced the majority of air-cooled containers with immersion cooling, with no expansion required. Initial sound readings on immersion containers indicate favorable results in sound reduction and compliance with all relevant state noise ordinances,” they wrote in an email.

The number of commercial-scale Bitcoin mining operations in the U.S. has increased sharply over the last few years; there are now at least 137. Similar medical complaints have been registered near facilities in Arkansas and North Dakota. And the Bitcoin mining industry is urgently trying to push bills through state legislatures, including in Indiana and Missouri, which would exempt Bitcoin mines from local zoning or noise ordinances. In May, Oklahoma governor Kevin Stitt signed a “Bitcoin Rights” bill to protect miners and prevent any future attempts to ban the industry.

While some Granbury residents are fiercely protesting the mine, many others feel powerless to alter the will of a company with legal, political, and financial might. And the data center industry at large is only growing more dominant, thanks to the twin forces of Bitcoin mining and AI, the latter which spends a vast amount of energy training generative models to find patterns in data sets. According to a recent report, data centers will use 8% of total U.S. power by 2030, up from 3% in 2022. And if operators continue to locate the centers near existing communities and prioritize profits above all else, then the story of Granbury could become the story of countless small towns across America.


Granbury sits about an hour southwest of Fort Worth in Hood County, which houses a mostly rural and Republican population of about 65,000 people. About a 15-minute drive south of Granbury’s charming historic town center—which includes a 19th-century opera house—lies a gas plant called Wolf Hollow II. Driving toward the plant on a windy, predawn morning in May, it rises out of the sky like an oil rig in a pitch-black ocean, lights ablaze.

But the glowing gas plant never caused substantial issues for the local residents. Rather, the problems started when Constellation Energy, which operated the plant, signed a deal in 2021 to power a new Bitcoin mining facility that would sit directly on its lot. The new facility consisted of 163 squat metal boxes resembling shipping containers, which housed a total of over 30,000 computers. These computers started running in the summer of 2022, and seemed to be switched on all day and night. As of December 2023, the Granbury mine is owned and operated by Marathon, one of the largest Bitcoin holders in the world.

The computers power a process called proof-of-work mining. Rather than relying on a central bank or governmental agency, Bitcoin is created, maintained, and guarded by watchdogs around the world known as miners, who prevent tampering through a complex cryptographic process and are rewarded with bitcoin for doing so. Bitcoin’s first supporters hoped that this new system would support a global digital currency that would bring freedom, financial fairness, and wealth to its adopters. 

But the system also requires an immense and ever-increasing amount of electricity. While Bitcoin’s first miners were solo operators often working out of their bedrooms, the industry is now dominated by a handful of billion-dollar corporations who operate industrial-size server farms across the globe. In the month of March 2024 alone, the Bitcoin mining industry generated a record $2 billion in revenue. 

Much of the American Bitcoin mining industry can now be found in Texas, home to giant power plants, lax regulation, and crypto-friendly politicians. In October 2021, Governor Greg Abbott hosted the lobbying group Texas Blockchain Council at the governor’s mansion. The group insisted that their industry would help the state’s overtaxed energy grid; that during energy crises, miners would be one of the few energy customers able to shut off upon request, provided that they were paid in exchange. After meeting with the lobbyists, Abbott tweeted that Texas would soon be the “#1 [state] for blockchain & cryptocurrency.” The following month, the Commissioners Court of Hood County approved the development of a cryptocurrency operation at Wolf Hollow. The owners promised local jobs and said that they would mostly use “stranded energy” that would otherwise go unused. 

For months during 2022, Granbury residents Nick and Virginia Browning sat in their front yard watching the new metal boxes of the massive facility be installed in the dirt across the road. “It layered our houses with dust. We haven’t gotten it all out yet,” Nick Browning, 82, says.

The dust, it turns out, was just a prelude to the noise. In order to cool the machines, the site’s operators attached thousands of fans to the containers, which churned constantly, emitting a vicious buzz. As more machines were switched on, the noise sounded like a ceiling fan, then a leaf blower, then a jet engine. It consumed afternoon dog walks and revved through cloudless nights, vibrating the trailer homes of many of the low-income residents who live blocks from the facility. The noise floated miles down the winding Brazos river, through the lush golf courses in the gated community Pecan Plantation and past county lines.

At first, residents responded to the intrusion by vacating their porches, retreating inside, and turning up their fans and air conditioners to the max. But many still felt tremors in their beds—including Larry Potts, a 77-year-old retired pastor who lives up the road from the plant. Potts says he stopped sleeping and started losing hearing in both ears. In February, his heart gave out after another sleepless night; he was rushed to the hospital and kept alive by an external pacemaker. There, he was diagnosed with third degree atrioventricular block, hypertension, and depression. 

May 21st, 2024: Larry Potts at his home in Granbury, Texas.

“I’m sick of this world and all this mess around here,” he says he told his wife that day, referring to the Bitcoin mine’s noise. “We moved out here for the peace and quiet. But this has made me want to go.” 

Some nearby residents say they haven’t been affected. But the number of strange medical emergencies in the area have piled up. In addition to Potts’ discharge papers, TIME reviewed medical records provided by several Granbury residents. Hospital notes from 72-year-old Geraldine Lathers’ three-day stay document new prescriptions for high blood pressure and vertigo. Jenna Hornbuckle, 38, lost hearing in her right ear and was diagnosed with heart failure; ear exams document her hearing loss along with that of her 8-year-old daughter Victoria, who contracted ear infections that forced doctors to place a tube in her ear. And Avari Burns, a 19-year-old cancer patient, says she suffered from crippling migraines at home—but whenever she went to a Fort Worth hospital for chemotherapy, the migraines subsided. 

Virginia Browning, 81, who can see the Bitcoin mine from her front yard, says she was taken to urgent care with violent vertigo after waking up one night mid-vomit. Browning says she gets so dizzy she can barely walk in a straight line, and that she rarely sleeps through the night. “When they crank this thing,” she says shakily, “I’m wide awake.”


 “We’re living in a nightmare,” Sarah Rosenkranz says, sitting at a barbecue restaurant in downtown Granbury on an evening in May. As rock music blares from the speakers and other patrons chatter away, Rosenkranz pulls out her phone and clocks 72 decibels on a sound meter app—the same level that she records in Indigo’s bedroom in the dead of night. In early 2023, her daughter began waking up, yelling and holding her ears. Indigo’s room directly faces the mine, which sits about a mile and a half away. She soon refused to sleep in her own room. She then developed so many ear infections that Rosenkranz pulled her from school in March and learned how to homeschool her for the rest of the semester. 

Over grilled salmon and hush puppies, Rosenkranz shares that her family has been sleeping peacefully at an inn downtown for the last three days in order to get away from the noise. But the next morning, after returning home, she contracts yet another migraine that lands her in urgent care.

Dr. Bhaloo, the ENT doctor in Granbury, says he’s seen an uptick since the new year in patients whose ailments—including ringing in their ears, vertigo, and headaches—could be related to the mine. “These people here, they’re good country folks, and Bitcoin, to them, is almost a foreign alien thing,” he says. “They don’t understand it. And [the noise] is detrimental to their health and anxiety.” Dr. Stephen Krzeminski, another Granbury ENT, agrees. “Sonic damage is real, there’s no disputing that,” he says. Krzeminski says he believes the mine is causing “mental and physical” health issues. “Imagine if I had vuvuzela in your ear all the time,” he says.

May 20th, 2024: Residential area near the Wolf Hollow Data Site in Granbury, Texas.

The level of noise is appalling to Dr. Thomas Münzel, a German cardiologist who is a leader in the growing field of scientific researchers measuring the impact of urban and industrial noise on humans. For the last 15 years, Münzel has studied how transportation and urban noise, especially at night, can be debilitating stressors on the heart, brain, and cardiovascular systems. In one study, he exposed young, healthy students to noise events up to 63 decibels, and found that their vascular function diminished after just a single night. In other studies, he’s found that nighttime noise pollution directly leads to heart failure and molecular changes in the brain, which may lead to impaired cognitive development of children and make some people more prone to developing dementia.

“The European Environmental Agency tells us that everything above 55 decibels is making us sick,” he says. The fact that the Granbury Bitcoin mine is emitting 70 or even 90 decibels on a nightly basis is “like torture,” he says. “The most spectacular cardiovascular diseases will develop. They have to stop the machines.”

Health effects have the potential to extend past the human residents of Granbury. Studies have shown that man-made noise pollution harms animals and wildlife, causing oxidative stress and memory loss in rodents, acute anxiety in dogs, and a decrease in forest growth. Shenice Copenhaver’s dog, Persephone, started going bald and developed debilitating anxiety shortly after the Bitcoin mine began operating four blocks away. Directly next door, Tom Weeks’ dog Jack Rabbit Slim started shaking and hyperventilating uncontrollably for hours on end; a vet placed him on the seizure medication Gabapentin. Rosenkranz’s chickens stopped laying eggs for months. And Jerry and Patricia Campbell’s centuries-old oak tree, which had served as the family’s hub and protector for generations of backyard family reunions and even a wedding, died suddenly three months ago.

It’s nearly impossible to prove the Bitcoin mine directly caused the afflictions of these specific animals and plants. But as the strange anecdotes collect, they’ve added to the stress of a town that feels under siege from all directions. 

“I’ve lived in Texas all my life and I’ve never seen an oak tree be beautiful one year and die the next,” Jerry Campbell says on his lawn, beneath the tree’s gnarled, blackened limbs. “It’s so strange.”


Hood County Constable John Shirley has spent months trying to find his own solutions to a problem that at times seems supernatural. As a former member of the Oath Keepers, a far-right militia whose leaders were convicted of seditious conspiracy against the U.S. government, Shirley is a somewhat divisive figure in the town. But lately Shirley has been laser-focused on the mine—an issue he considers apolitical. “When you’ve got Greenpeace supporting the same cause as a former Oath Keeper, what weird episode of the Twilight Zone are we in?” he says, chuckling darkly. (Shirley resigned from the Oath Keepers before Jan. 6, 2021, due to “serious concerns” with the direction of the organization, he says.)

May 20th, 2024: Shenice’s dog that is going bald in Granbury, Texas.

On a listless May morning before the sun has risen, Shirley is sitting in his truck across the road from the mine. He is used to getting up at this hour, as he’s been taking decibel readings of the plant around the clock in order to write tickets against the mine’s operators for disorderly conduct. Shirley sticks his recorder out the window and the numbers on it flicker up and down as the roar washes over it. Eventually, the recorder caps out at 91 decibels, which the CDC estimates as roughly in between the output of a lawnmower and a chainsaw.

This level of noise, the CDC writes, can cause hearing damage after two hours of exposure. The Occupational Safety and Health Administration advises that employees can only work in 90-decibel settings for eight hours a day and are required to wear ear protection. And Texas state penal code deems any noise above 85 decibels unreasonable. Over the course of 2024, Shirley has recorded a noise above 85 decibels coming from the plant more than 35 times.

Technically there is federal mandate to regulate noise, which stems from the 1972 Noise Control Act—but it was essentially de-funded during the Reagan administration. This leaves noise regulation up to states, cities, and counties. New York City, for instance, has a noise code which officially caps restaurant music and air conditioning at 42 decibels (as measured within a nearby residence). Texas’s 85 decibels, in contrast, is by far the loudest state limit in the nation, says Les Blomberg, the executive director of the nonprofit Noise Pollution Clearinghouse. “It is a level that protects noise polluters, not the noise polluted,” he says. 

Ultimately, Constable John Shirley can’t stop the machines, because there is no state law forcing the operator of a noisy machine to turn it off. When Shirley writes a ticket for disorderly conduct, it merely triggers a $500 fine, as opposed to jail time or another punitive measure. Hood County can’t even pass a relevant noise ordinance law: only Texas cities, not counties, have the ability to do so. 

Shirley’s tickets now add up to a theoretical fine of $17,500 and counting. But that number is chump change for Marathon, which earned $165 million in revenue in the first quarter of 2024 and bragged to shareholders about “record earnings.” And the company is fighting back: They have requested a jury trial to overturn this low-level misdemeanor, which starts July 8. At a pre-trial hearing in May, the company arrived with a full team of lawyers. “To bring two or three full-suited attorneys to a justice of the peace court citation issue: I’ve never seen that,” says Patrick Ryan, a local lawyer who has consulted with Granbury community members about the possibility of a civil nuisance lawsuit. “They’re coming with both barrels.” 

A representative for Marathon declined several interview requests with TIME, saying that the company would refrain from commenting publicly until Constable Shirley’s “unwarranted” citations against the plant had been resolved. As Shirley sits outside the facility recording the pulsating drone, his nostrils flare, and his voice rises with impatience. “When I was a murder investigator and someone killed somebody, I had the law on my side,” he says. “With this, it’s like I’m swatting at a rhinoceros.” As he reads the decibel levels on his sound meter, a security guard from the facility steps out of his car and snaps pictures of Shirley’s truck in the dark.

May 20th, 2024: Cheryl Shadden on her property in Granbury, Texas.

The residents of Granbury feel they’ve been lied to. In 2023, the site’s previous operators, US Bitcoin Corp, constructed a wall around the mine almost 2,000 feet long and claimed that they had “solved the concern.” But Shirley says that the complaints from the community about the sound actually increased when the wall was nearing completion last fall. Since Marathon bought the facility outright in December, its hash rate, or computational power expended, has doubled.

As complaints mounted at the top of 2024, the company contended it did not know about the extent of the sound issues. “We are now the owners, but we are not the operator. USBTC is still the operator. Prior to the purchase, we were not aware of the noise issues,” a Marathon representative wrote to TIME in an email in January. “Now that we own the site and have been made aware of the issue, we are working to gather information and address the situation.”

But documents show that Marathon provided a $67 million loan in May 2021 to the site’s first formal owners, Compute North, to build out the site’s infrastructure, and Marathon’s purchase agreement of the site, dated December 15, 2023, clearly mentions the existence of the $1.9 million “sound wall” built several months prior.

As community complaints reached a fever pitch earlier this year, Marathon held a meet-and-greet on March 29—Good Friday, which rubbed many people in Granbury’s deeply religious community the wrong way. For the handful of people that did show up, Marathon laid out a noise mitigation plan which included turning off idle fans, moving some containers into liquid cooling by April 2024, and installing vegetation and trees around the perimeter. 

In an emailed statement to TIME in late June, Marathon said that 58 air-cooled containers have been removed from the site, and pointed to a roadmap which vows to convert 50% of the site’s containers to immersion cooling by the end of the year. A representative for Constellation Energy, which owns the power plant that Marathon connects to, said in a statement that the company is “staying updated on [Marathon’s] efforts to respond to the concerns raised by neighbors… We will continue working closely with Marathon as they take actions to reduce their impacts.”

Marathon says that immersion cooling, in which computers are placed in tubs of oil, will largely fix the noise problem. But the technique has potential drawbacks, including the difficulty of regularly performing maintenance on a computer submerged in oil, says Kent Draper, the chief commercial officer of the Bitcoin and AI data center operator IREN. “Although it’s been around for a long time in the industry, it’s just not that widely adopted,” he says. 

Even Marathon expressed skepticism about its ability to convert its many machines to immersion technology in a 2023 year-end SEC Report. “There is a risk we may not succeed in developing or deploying immersion-cooling at such a large scale to achieve sufficient cooling performance,” the company wrote. 

In an email to TIME, Marathon wrote: “While we are confident in our ability to scale this new technology, it is our obligation, as a publicly traded company, to identify any potential risks from a financial perspective.”


Granbury community members are exploring political and legal avenues. A petition against the mine in Granbury and its “excessive and unhealthy noise” garnered 800 in-person signatures, and was brought by representatives to the Texas Republican state convention in San Antonio in May, with the hopes of gaining statewide support for some sort of ban. But two local elected officials, Nannette Samuelson and Shannon Wolf, say they tried to take the floor to stump for the issue, but weren’t given time to speak. Samuelson’s goal is now to pass resolutions in commissioners court prompting state senators to draft legislation.  

Any statewide legislation is sure to hit significant headwinds, because the very idea of regulation runs contrary to many Texans’ political beliefs. “As constitutional conservatives, they have taken our core values and used that against us,” says Demetra Conrad, a city council member in the nearby town of Glen Rose. 

Some community members are also exploring a potential civil nuisance suit against Marathon, in which they would seek an injunction against the company and/or damages. One affected woman, Cheryl Shadden—who has medically-documented hearing loss—has retained the nonprofit Earthjustice to examine potential litigative routes. Deputy managing attorney Mandy DeRoche says Earthjustice is exploring the possibility of taking its own sound readings near the site. The nonprofit has been involved in several lawsuits against crypto mining companies across the country. 

“Historically, Bitcoin miners go to the cheapest source of electricity with the least amount of regulation, and they do the cheapest thing possible,” DeRoche says. “It’s one of the reasons why noise pollution from crypto mining tends to be so much worse than traditionally-operated data center operators.” 

As Bitcoin continues to gain value, miners are building progressively bigger operations, causing gas plants and other fossil fuel emitters to spring back into action. It is unclear whether states even have the energy capacity to support this new demand: In June, Texas lieutenant governor Dan Patrick tweeted that Texans “will ultimately pay the price” for the growth of crypto and AI data centers, writing that they “produce very few jobs compared to the incredible demands they place on our grid.” Regardless, Bitcoin lobbying groups are attempting to pass pro-Bitcoin-mining bills in state legislatures across the country, which would exempt similar operations from noise ordinances and local zoning laws. People have reported similar symptoms near Bitcoin mines in Arkansas and Williston, North Dakota. Ultimately, Granbury is just one canary of several in the proverbial mine. 

In the week before this article’s publication, two more Granbury residents suffered from acute health crises. The first was Tom Weeks, the owner of the hyperventilating dog. On July 2, Weeks, 64, rose after another sleepless night of listening to the mine and realized he couldn’t breathe. He was rushed to a Fort Worth hospital, where he was diagnosed with a pulmonary embolism—a blood clot blocking his lungs—and hooked up to an oxygen tank. Weeks was supposed to testify against Marathon in the jury trial, but is now physically unable to do so. “This whole thing is an eye opener for me into profit over people,” Weeks says in a phone call from the ICU. 

The second person affected was the five-year-old Indigo Rosenkranz. On July 6, she suffered from a seizure and was taken to the emergency room, before being routed to a childrens’ hospital in Fort Worth for further testing. Her mother, Sarah, was terrified and now feels she has no choice but to get a second mortgage to move away from the mine. “A second one would really be a lot,” she says. “God will provide, though. He always sees us through.”

Why So Many Bitcoin Mining Companies Are Pivoting to AI

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As AI companies work furiously to improve the intelligence and usefulness of their products, their demand for cheap, plentiful energy has skyrocketed. This gold rush has been extremely profitable for an unlikely beneficiary: Bitcoin miners.

In recent months, major Bitcoin mining companies have started to swap out some of their mining equipment in favor of rigs used to run and train AI systems. These companies believe that AI training could provide a safer and more consistent source of revenue than the volatile crypto industry. And so far, these pivots have been warmly received by investors, leading to the market cap of 14 major bitcoin mining companies jumping in value by 22%, or $4 billion, since the beginning of June, J.P. Morgan reported on June 24. 

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This transition reflects several trends of the moment: the roaring hype cycle of AI; the dwindling access to power, and a tenuous bitcoin mining landscape following the bitcoin halving. 

Read More: What’s the Deal With the Bitcoin Halving?

The AI boom has led to an enormous demand for energy

Generative AI models like ChatGPT improve through the brute computational might of data centers, which process massive data sets to find patterns and improve responses. But computing power is expensive, and for years, wasn’t a worthwhile investment for many data center operators. When IREN, a data center and bitcoin mining company, looked into using their spaces for machine learning four years ago, “there just wasn’t enough volume from a commercial perspective for it to make sense,” says Kent Draper, IREN’s chief commercial officer. 

But the gargantuan success of ChatGPT beginning in late 2022 changed the calculus, and other AI companies raced to train and run their own models in the hopes of outpacing OpenAI’s flagship model. This requires a stupendous amount of energy: A ChatGPT query, for example, uses 10 times more energy than a standard Google query. 

This leaves AI companies on the hunt for direct access to inexpensive power sources, large tracts of land to hold warehouses filled with thousands of computers, and resources like water or giant fans to cool their machines. Their ravenous activity means it’s becoming increasingly competitive to find sites that meet those criteria, especially in North America. Some jurisdictions have implemented long waitlists for large data centers to connect to the grid. And once companies get initial approval, building a data center from scratch can take years, millions of dollars, and necessitate lengthy slogs through regulation and bureaucracy. 

Read More: How AI Is Fueling a Boom in Data Centers and Energy Demand

“If you go back five or 10 years, 80% of the data center loads were located in six or seven primary markets,” says Nazar Khan, the COO and CTO of the bitcoin mining company Terawulf. “Those markets are filled up, and a couple of them have already issued moratoriums on further data center construction. So those data center loads are now looking for new homes.”

Bitcoin miners face headwinds

Some of those homes, it turns out, lie within the existing facilities of bitcoin miners. Bitcoin miners uphold and safeguard the bitcoin network through a complex computational process, and earn bitcoin for doing so. In the early years of bitcoin, miners found that increasing the size of their computer rigs vastly increased their profits, so they created enormous server farms which tapped into cheap sources of energy and ran day and night.

Large-scale bitcoin mining has historically been an immensely profitable business. But it is also subject to the whims of the volatile crypto market. Following the 2022 crypto crash—which was precipitated by the risky endeavors of entrepreneurs like Sam Bankman-Fried and Do Kwon—many miners were thrust into bankruptcy or shuttered their doors altogether. 

Mining companies who survived the crash reaped profits in 2023 and early 2024. But a new challenge emerged this April: a technical update to Bitcoin called the halving, which slashed miners’ rewards in half. Bitcoin miners hoped that the halving would lead to a dramatic increase in the price of bitcoin, as has happened in previous crypto cycles, to offset this reward decrease. But bitcoin’s price has stayed more or less even since April, squeezing bottom lines, and forcing some miners to seek ways to diversify their business models. AI training is at the top of the list. 

“You’ve seen a number of crypto miners that were sort of struggling that have actually made a full pivot away, and that may have been a function of necessity,” Draper says. 

The partnership between the AI and bitcoin mining industries is a logical one, given the needs from both sides. AI companies need the space, access to cheap energy, and infrastructure that bitcoin miners already have. And bitcoin miners seek the stability of AI compute revenue, and the enormous potential profits flowing from the current AI hype cycle. 

Some bitcoin mining companies are leasing their space to AI clients. In June, Core Scientific—which recently emerged out of bankruptcy stemming from the 2022 crypto crash—announced it would host over 200 megawatts of GPUs (graphic processing units, which power AI training and operation) for the AI startup CoreWeave. Core Scientific CEO Adam Sullivan told TIME in April that AI companies were making aggressive offers for the use of bitcoin mining facilities: “They have started to buy up mining sites for greater prices than what Bitcoin miners are willing to pay,” he said. He added that the number of requests from AI companies was “extraordinarily high on our side, and we’re evaluating our best go-to-market here.”

Other bitcoin mining companies are operating the GPUs themselves. On June 24, bitcoin miner Hut 8 received a $150 million investment from Coatue Management to build artificial intelligence infrastructure. And in some IREN facilities, GPUs, for AI, and ASICs (application-specific integrated circuits which power bitcoin mining), share the same walls.  “We view them as mutually complementary: They’re quite different business profiles,” Draper says. “Bitcoin is instant revenue but somewhat more volatile. AI is customer-dependent—but once you have customers, it’s contracted and more stable.” 

This increase in demand has climate repercussions

With bitcoin miners operating in both industries, an enormous amount of energy is being used. Data centers use 10 to 50 times the energy of a typical commercial office building, the U.S. Department of Energy says. A recent Goldman Sachs report predicted that data centers will use 8% of total U.S. power by 2030, up from 3% in 2022. This level of electricity growth “hasn’t been seen in a generation,” the report read

Some bitcoin companies, like Terawulf, say they’re focused on using green energy. But many of the new data centers overall are being powered by fossil fuels. “Some of the smaller renewables don’t meet the demand for consistent and high quality energy that some of the high speed compute folks require,” Khan says. “You’re seeing utilities proposing to add more large-scale gas-fired power plants, which we haven’t seen for a number of years. It will take a portfolio of facilities: gas, nuclear, renewables to meet this need.”

All of this activity is concerning climate activists. “Bitcoin miners are diversifying into traditional data centers and AI—and obviously they use different machines, but they still use voracious amounts of energy,” says Mandy DeRoche, a deputy managing attorney at Earthjustice’s clean energy program. “That tremendous increase in energy demand has consequences for the grid, for the cost of electricity, and the climate.”

Andrew R. Chow’s book about crypto, Cryptomania, will be published in August and is available for preorder.

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