Shares of Riot Platforms (RIOT) rose nearly 9% on Wednesday after activist investor Starboard Value LP released a letter urging the company to accelerate its transition from Bitcoin mining to an AI infrastructure provider. The goal is for Riot to secure high-margin artificial intelligence and high-performance computing (AI/HPC) hosting deals.
Riot’s 1.7 gigawatts of fully available power capacity places the company “well-positioned to execute high-quality AI/HPC deals,” Starboard said, highlighting two of Riot’s Texas-based sites, Corsicana and Rockdale, as “prime” locations for data center development.
Starboard said that if Riot can monetize its energy in line with recent deals in the space, “it could generate more than $1.6 billion” in annual EBITDA. The group praised Riot’s recent deal with AMD, which is expected to bring in $311 million over 10 years.
With a market capitalization of $4.25 billion, Texas-based Riot is the fifth-largest bitcoin mining company in the United States. Its shares are up 19% over the past year, but remain about 80% below the highs reached during the 2021 bitcoin bull market. They have also underperformed miners like IREN, Cipher Mining and Hut 8, which were quicker to recognize and pivot to AI strategies.
Starboard was Riot’s fourth largest shareholder at the end of last year, and this isn’t the first pressure the company has faced. In December 2024, Starboard asked Riot to convert some of its bitcoin mining sites into data centers capable of hosting HPC machines to support large tech companies.
While Riot Platforms has built its business around bitcoin mining, the pivot to AI infrastructure could diversify its revenue as power-hungry models like OpenAI’s GPT-4o and others drive demand for data centers. Riot’s access to electricity, a rare commodity in today’s energy-constrained data center market, could be used to lease capacity to large AI companies.
Starboard urged CEO Jason Les and Executive Chairman Benjamin Yi to act “with urgency” and position Riot as a long-term infrastructure provider for AI workloads.
