Riot Platforms (RIOT) shares rose almost 9% on Wednesday after activist investor Starboard Worth LP launched a letter urging the corporate to speed up its transition from Bitcoin mining to AI infrastructure supplier. Riot's goal is to pursue profitable synthetic intelligence and excessive efficiency computing (AI/HPC) internet hosting offers.
Starboard mentioned Riot's 1.7 gigawatts of totally out there energy capability places the corporate “well-positioned to execute high-quality AI/HPC transactions,” and highlighted Riot's two Texas-based areas, Corsicana and Rockdale, as “premier” areas for information heart growth.
Starboard mentioned if Riot can monetize its energy in step with current offers within the house, it “might generate greater than $1.6 billion” in annual EBITDA. The group praised Riot's current take care of AMD, which is anticipated to generate $311 million in income over 10 years.
Texas-based Riot, with a market capitalization of $4.25 billion, is the fifth largest Bitcoin mining firm in the US. The corporate’s inventory worth has risen 19% over the previous 12 months, however stays about 80% under the highs reached in the course of the 2021 Bitcoin bull market. It additionally underperformed miners like IREN, Cipher Mining, and Hut 8, which acknowledged earlier and transitioned to AI methods.
Starboard was Riot's fourth-largest shareholder on the finish of final 12 months, and this isn't the primary time Starboard has put stress on the corporate. In December 2024, Starboard requested Riot to transform a few of its Bitcoin mining websites into information facilities that might host HPC machines to help massive tech firms.
Riot Platforms has constructed its enterprise round Bitcoin mining, however a pivot to AI infrastructure might diversify its income as power-hungry fashions akin to OpenAI's GPT-4o drive demand for information facilities. Riot's energy entry, a uncommon commodity in right now's energy-constrained information heart market, could possibly be used to lease capability to massive AI firms.
Starboard referred to as on CEO Jason Les and Government Chairman Benjamin Yee to behave “with speedy impact” and place Riot as a long-term infrastructure supplier for AI workloads.
