Shares of Riot Platforms (RIOT) rose practically 9% on Wednesday after activist investor Starboard Worth LP revealed a letter pressuring the corporate to speed up its transition from bitcoin mining to AI infrastructure supplier. The aim is for Riot to pursue high-margin synthetic intelligence and high-performance computing (AI/HPC) internet hosting offers.
Riot’s 1.7 gigawatts of totally accessible energy capability makes the corporate “properly positioned to execute high-quality AI/HPC offers,” Starboard mentioned, highlighting two of Riot’s Texas-based websites, Corsicana and Rockdale, as “prime” places for information heart improvement.
Starboard mentioned that if Riot can monetize its energy based mostly on latest transactions within the area, it “might generate greater than $1.6 billion” in annual EBITDA. The group praised Riot’s latest cope with AMD, which is predicted to generate $311 million over 10 years.
With a market capitalization of $4.25 billion, Texas-based Riot is the fifth-largest bitcoin mining firm within the U.S. Its shares have risen 19% up to now 12 months, however stay down about 80% from the highs reached through the 2021 bitcoin bull market. They’ve additionally underperformed miners comparable to IREN, Cipher Mining and Hut 8, which had been faster to acknowledge and transition to AI methods.
Starboard was Riot’s fourth-largest shareholder on the finish of final 12 months, and this is not its first push towards the corporate. In December 2024, Starboard requested that Riot convert a few of its bitcoin mining websites into information facilities able to internet hosting HPC machines to assist giant expertise firms.
Whereas Riot Platforms has constructed its enterprise round bitcoin mining, the pivot towards AI infrastructure might diversify income as power-hungry fashions, comparable to OpenAI’s GPT-4o and others, drive information heart demand. Riot’s energy entry, a uncommon commodity in right now’s power-constrained information heart market, may very well be used to lease capability to main AI firms.
Starboard urged CEO Jason Les and CEO Benjamin Yi to behave “with urgency” and place Riot as a long-term infrastructure supplier for AI workloads.
