Sphere 3D Data Center, Hopkinsville, Kentucky

Sphere 3D, a cryptocurrency mining company, plans a 50 megawatt data center in Hopkinsville, in Christian County, Kentucky, and wants to convert the 15 megawatt bitcoin mine it already runs in the city to AI and high performance computing. Its subsidiary North Campbell Land Co. put both proposals to a July 27, 2026 public hearing on the city's first data center zoning rules, and neither has been approved yet.

The existing mine is 22 modular units that have run for about three years inside Hopkinsville Electric System's Holland Substation, and residents' discovery of it pushed the city toward writing its first rules. It takes part in a flexible load program, so its power can be cut back or stopped when the Tennessee Valley Authority system is under strain. The new 50 megawatt data center would go on a separate site the company has not disclosed. North Campbell has offered to pay for a new 65 megawatt substation for the utility, estimated at $8 million to $10 million, with the 15 megawatts left over available to other customers. Jeff Hurd, the utility's general manager, told council members that the Tennessee Valley Authority could supply the extra power without affecting service to its roughly 13,000 customers, and that the substation could be ready in six to 12 months. North Campbell became part of Sphere 3D when it bought Cathedra Bitcoin in June 2026, and the company reported a second quarter net loss of $13.8 million with $2.8 million in cash at the end of June. In September it raised $5 million in a private placement, agreed to sell its Iowa site and about 5,500 mining machines, and said it had secured a land option in Hopkinsville for the new data center.

Thomas Masiero, speaking for North Campbell, told the hearing: "To the best of my knowledge, there has not been a noise or water complaint against our facility during the three years of operation." Hurd said the utility, about 80% of whose customers are households, needs the income: "To avoid future rate increases on the backs of our customers, HES is constantly looking for additional revenue to offset these costs." The company's attorney, Robert Ison, said the draft rules went too far: "Make no mistake, if you adopt the more restrictive ordinance, you will effectively ban data centers in the city of Hopkinsville." Sherry Byerline of Pembroke said she can already hear industrial machinery running several miles from her home. "Once they get in and get a foothold, they pretty much do what they want to do, and this creates continuous pollution," she said. Becca Hostilo of Hopkinsville asked the city to require closed loop cooling, to consider capping the number of data centers, and to "make sure that Little River and Lake Barkley are kept safe." The company's representatives said the new building would use a closed loop system that recirculates water.

The July draft would have allowed data centers under 75 megawatts and 50,000 square feet, set 1,000 feet back from homes and public property, and banned anything bigger as hyperscale; the existing mine would keep grandfathered status. By September 18 the planners had reworked it: data centers would be sorted by footprint, from small at up to 25,000 square feet to hyperscale at 150,000 or more, confined to the I-1 and I-2 industrial districts with a conditional use permit. The committee cut the setback for large facilities from 300 to 150 feet and the buffer from non-industrial land from 1,000 to 500 feet after Community and Development Services president Tom Britton said the old figures left few properties in the city where a large data center could go. The new draft also caps waste heat at a 5 degree Fahrenheit rise at the property line and requires decommissioning within 24 months of a site shutting down. Planning commission chairman Dan Thomas said no moratorium is needed, because a use not listed in the city's zoning, including data centers and cryptocurrency operations, cannot locate in Hopkinsville without a zoning amendment first. The second public hearing is at 6 p.m. on September 28, 2026, in the Hopkinsville Community College auditorium. Comments there could change the draft again before it goes to the full planning commission and then to the Hopkinsville City Council, which has the final say.