The complex corporate web behind a $3.2 billion AI data center
A fire at the Lake Mariner data center in Somerset, New York, highlighted safety and accountability issues amid its complex corporate ownership. Residents and authorities are questioning TeraWulf's commitments regarding safety, job creation, and environmental impact, with state-level regulatory efforts and a new moratorium also in play.
A recent fire at the unfinished Lake Mariner data center in Somerset, New York, has exposed significant safety concerns and a lack of accountability from the project's developers. Steve Matisz, chief of the Barker Fire Department, reported that firefighters found no working alarms, suppression systems, or functional hydrants, and the legally required safety documents were reportedly destroyed in the blaze, forcing crews to operate "blind."
The $3.2 billion AI data center campus, a former coal mine site, involves a complex web of stakeholders: TeraWulf owns and operates the facility on land leased from Somerset Operating Company (owned by TeraWulf CEO Paul Prager), Fluidstack will run the center, Google holds a potential 14 percent equity stake and guarantees Fluidstack's lease, and Anthropic is a major compute client. TeraWulf claims responsibility for operational safety and has implemented new safety measures following the fire, but Matisz stated that hydrants remain dry. Local officials, including Somerset town supervisor Jeffrey Dewart, have expressed frustration over TeraWulf's unresponsiveness to community concerns and the discrepancy between promised and actual job creation (35-40 permanent jobs vs. 165 promised).
The article also delves into the environmental impact, specifically regarding electricity and noise. New York Governor Kathy Hochul has enacted a one-year moratorium on hyperscale data center permits, acknowledging the gap between large projects and minimal job creation. The New York State Legislature passed a broader Responsible Data Center Development Act, which includes a one-year moratorium on new permits for facilities over 20MW and mandates environmental impact analysis and renewable energy transitions by 2040, but it remains unsigned. These policies, however, do not affect Lake Mariner, as its 500-megawatt buildout was permitted prior to their implementation. Companies like Anthropic have made commitments to cover electricity price increases, but verifying clean energy claims at leased sites like Lake Mariner remains challenging, with Google's stricter real-time matching standards adding another layer of complexity.