An influential investment firm is calling on cryptocurrency mining company Riot Platforms to accelerate its pursuit of artificial intelligence data center partnerships, arguing the company has prime positioning to benefit from surging AI infrastructure needs.
Starboard Value made the appeal Wednesday in correspondence to Riot’s leadership, causing the company’s stock price to climb roughly 5% during pre-market hours.
The recommendation highlights a broader transformation within the cryptocurrency mining sector, as companies seek alternative revenue streams from their substantial electrical capacity while bitcoin mining returns remain unpredictable and AI data center requirements expand dramatically.
According to Starboard’s correspondence to Riot CEO Jason Les and Executive Chairman Benjamin Yi, artificial intelligence and high-performance computing firms are increasingly viewing crypto miners as appealing sources of immediate power capacity for their data operations.
The investment firm noted that Riot’s stock performance has lagged behind competitors who have successfully negotiated substantial AI and high-performance computing contracts.
“In such a dynamic and rapidly evolving AI/HPC demand environment, Riot must urgently seize this extraordinary opportunity,” Starboard Managing Member Peter Feld said in the letter.
Riot has not yet provided a response to requests for comment.
Starboard, holding approximately 12.7 million Riot shares, highlighted the company’s two primary Texas locations in Corsicana and Rockdale as ideally situated to meet this growing demand.
Combined, these operations provide roughly 1.7 gigawatts of accessible power capacity appropriate for AI data center applications, the correspondence indicated.
The investment firm advised prioritizing premium, institutional-grade tenants, including major cloud computing providers, rather than simply pursuing maximum rental rates.
While Starboard viewed Riot’s recent partnership with Advanced Micro Devices as encouraging, they described it as merely a limited pilot program.
The activist investor recognized Riot’s efforts to enhance corporate governance and operational effectiveness, noting the addition of board members with data center expertise and the recruitment of a dedicated chief data center officer.
