Shares of Riot Platforms (RIOT) rose almost 9% Wednesday after activist investor Starboard Worth LP launched a letter urgent the corporate to speed up its transition from bitcoin mining to AI infrastructure supplier. The intention is for Riot to pursue high-margin synthetic intelligence and high-performance computing (AI/HPC) internet hosting offers.
Riot’s 1.7 gigawatts of absolutely out there energy capability make the corporate “nicely positioned to execute high-quality AI/HPC offers,” mentioned Starboard, highlighting two of Riot’s Texas-based websites, Corsicana and Rockdale, as “premier” places for knowledge heart growth.
Starboard mentioned that if Riot can monetize its energy in step with latest transactions within the house, “it may generate greater than $1.6 billion” in annual EBITDA. The group praised Riot’s latest take care of AMD, which is projected to yield $311 million over 10 years.
With a market cap of $4.25 billion, Texas-based Riot is the fifth-largest bitcoin mining firm within the U.S. Its shares have risen by 19% up to now 12 months, however stay decrease by about 80% from highs hit in the course of the 2021 bitcoin bull market. They’ve additionally underperformed miners like IREN, Cipher Mining, and Hut 8, which have been faster to acknowledge and transition to AI methods.
Starboard was Riot’s fourth-largest shareholder as of the top of final 12 months, and this is not its first push on the corporate. In December 2024, Starboard requested that Riot convert a few of its bitcoin mining websites into knowledge facilities able to internet hosting HPC machines to assist huge tech firms.
Whereas Riot Platforms has constructed its enterprise round bitcoin mining, the pivot towards AI infrastructure may diversify income as power-hungry fashions like OpenAI’s GPT-4o and others drive knowledge heart demand. Riot’s energy entry, a uncommon commodity within the present energy-constrained knowledge heart market, could possibly be used to lease capability to main AI corporations.
Starboard urged CEO Jason Les and Govt Chairman Benjamin Yi to behave “with urgency” and place Riot as a long-term infrastructure supplier for AI workloads.
