A construction stoppage at a massive 1.8-gigawatt data center in Wyoming may have added fuel to the fire of the semiconductor sell-off earlier this week. Computing infrastructure company Crusoe said it decided to "pause" work at the Project Jade site in Wyoming, leading to fears that the artificial intelligence buildout was running up against financing constraints or tapering demand for overall capacity. But the project is still very much a go – and it will be moving forward without Crusoe. Justin Arnold, head of the Laramie County Planning Department in Wyoming, told CNBC on Wednesday that the site's end user – which he identified as hyperscaler Google – was getting a different contractor to submit a site plan. "Google has tasked a new contractor with submitting a site plan," Arnold said. "The data center portion of it was previously tasked – Crusoe was previously tasked with it, and now there's just a different firm that's resubmitting a different site plan, but the concept of the project is still the same. And again, we anticipate another application," he said. Arnold declined to name which company was replacing Crusoe but said that "it's an engineering firm." He said he didn't know why the change of contractors had taken place. Arnold added that powerplant builder Tallgrass was still building the power hub portion of the project and that the work is continuing apace. A Tallgrass representative confirmed to CNBC on Thursday that the overall development remains on track. Bank of America, in a Thursday note on natural gas and electric company Black Hills Corporation, also noted that Crusoe is no longer working on the 1.8-gigawatt Wyoming project and that the project is nonetheless progressing. Black Hills serves customers in eight states, including Wyoming. "On June 10, [Black Hills] confirmed that Crusoe is no longer the development partner for the Cheyenne project," analyst Ross Fowler wrote. "Importantly, however, [Black Hills] also stated that the 1.8 GW project has not been paused, continues to advance as planned, and remains tracking toward early-2028 service." On Wednesday, Crusoe CEO Chase Lochmiller told CNBC that Crusoe had stopped work on the project due to a "customer-driven pause." He didn't identify the customer, and said the pause was not due to permitting issues. Adding to market jitters, especially in tech Crusoe's construction pause at the Project Jade site in Wyoming was first reported by Bloomberg on Tuesday and may have added to market jitters this week – particularly in technology stocks that started selling off late last week. The sell-off was concentrated in chip stocks, after chipmaker Broadcom last Wednesday held steady on AI chip sales guidance . Many chip stocks had gone parabolic through April and May. The selling was initially thought to be simple profit-taking off of sky-high valuations in the sector, but the rout continued into the earlier part of this week. The PHLX Semiconductor Index (SOX) dropped nearly 2% on Tuesday and 3.6% on Wednesday but closed up nearly 8% Thursday as the tech sector rebounded. .SOX 5D mountain SOX 5-day chart Investors sold $10.8 billion in tech shares last week – the largest amount ever tracked for selling in the sector by Bank of America, with data going back to 2008. Outflows as a percentage of the S & P 500 tech sector's market capitalization were the highest since 2014, the bank said. There was some speculation on Wall Street that the construction pause in Wyoming may have been a signal that data center builders were rethinking capacity needs or having issues with financing. Bank of America's Fowler said he needs more clarity before properly valuing the project. "On June 9, Crusoe – the Project Jade developer – said it now holds contracts for newly 5 GW of data center capacity and, at its customer's request, has paused development activity the Project Jade site. ... We will look for clarity with the customer's timeline and committed capacity before revisiting the valuation of the project," the analyst wrote. The reshuffle at Project Jade appears to be more microeconomic in nature rather than macro and confined to the companies involved in the development. Indeed, Google announced earlier this month a raise of more than $84 billion in equity finance capital. "That project is full steam ahead," Betsey Hale, CEO of Cheyenne LEADS, an economic development corporation for Cheyenne City and Laramie County, Wyoming, which works on multiple data centers in the area, told CNBC on Thursday. "We do not know [who the new contractor is]," she said. "All that planned unit development was approved under the previous relationships. What will have to happen is some amendments to those agreements … I would look for that maybe next week sometime."
<small>Source: CNBC</small>
