City of Denton approves major investment in AI computing facility

In a recent city council meeting, Denton officials discussed significant amendments to agreements with Core Scientific Inc., a cryptocurrency and high-performance computing operation. The council approved two key items: an amendment to the power purchase agreement and a lease amendment, both aimed at facilitating Core Scientific's transition from cryptocurrency mining to high-performance computing, particularly in artificial intelligence.

Terry Nolte from Denton Municipal Electric (DME) outlined the implications of these changes, emphasizing a projected $1 billion investment in the community and the potential for increased annual revenue of $3 to $4 million for the city. The new facility is expected to operate on 100% renewable energy, aligning with Denton's renewable resource plan. The council noted that the facility's operation would not compromise the stability of electricity supply to local residents, as all necessary infrastructure studies have been completed.

Concerns were raised by council members and residents regarding the financial risks associated with Core Scientific's previous bankruptcy and the speculative nature of cryptocurrency. However, Nolte reassured attendees that robust security measures are in place to protect ratepayers, including cash collateral and a structured payment system that allows for quick cessation of energy delivery in case of default.

Additionally, the council discussed the upcoming tax rate proposal, which is mandated by state law. Chief Financial Officer Jessica Williams clarified that the vote was merely an intent to set a tax rate, with public hearings scheduled for September. The proposed tax rate aims to remain below the voter approval threshold, avoiding the need for an election.

Overall, the meeting highlighted Denton's strategic move towards embracing high-performance computing while addressing community concerns about energy supply and financial stability.