Starboard Urges Riot to Tap AI Power Potential for Billion-Dollar Value Boost

Starboard Value has called on Riot Platforms to seize what it views as a major opportunity for value creation by using its power capacity to support AI data centers for the high-performance computing industry. In a letter to the company’s CEO and executive chairman, the activist investor emphasized that timely action is crucial to secure larger, more impactful agreements capable of fully realizing the potential of Riot’s energy assets.

Riot’s AI Shift Faces Urgency

Peter Feld, managing member of Starboard Value, acknowledged Riot’s recently disclosed partnership with Advanced Micro Devices as a constructive step. He noted that the arrangement highlights the inherent strength of the Bitcoin miner’s core locations. However, Feld characterized the deal as an initial test rather than a transformative move, suggesting that larger, more substantial contracts are needed to fully reflect its potential.

The Starboard executive also pointed out that Riot’s stock performance has trailed peers that have already secured sizeable AI and high-performance computing agreements. In his view, the market has rewarded companies that moved decisively into AI infrastructure, while Riot’s slower pace has weighed on its valuation.

Riot is part of a broader trend among publicly listed Bitcoin miners repositioning toward AI by repurposing their energy-heavy mining operations. During its third-quarter earnings presentation, the company indicated that its Bitcoin mining strategy is evolving. Even so, Starboard appears unconvinced that the transition is advancing quickly enough.

Although this underperformance is frustrating, we believe that Riot is better positioned to do higher-quality deals than its peers. Time is of the essence, and a renewed sense of urgency is required to get more material deals completed.

Peter Feld

Power Assets Seen as Major Value Driver

To reinforce its argument, Starboard highlighted Riot’s two primary sites in Corsicana and Rockdale. The firm described both locations as well-suited for AI and high-performance computing data centers. Together, the facilities offer about 1.7 gigawatts of power capacity.

Based on that scale, Starboard estimated that expanding AI and HPC operations at Riot’s sites could generate between $9 billion and $21 billion in equity value, well above the company’s current market capitalization. Factoring in Riot’s net cash position, the implied per-share valuation could range from $23 to $53, excluding potential contributions from the company’s Bitcoin mining operations or engineering initiatives.

However, reaching the upper end of $53 would require the stock to surge roughly 242% from Wednesday’s closing price of $15.49; even so, over the past six months, Riot’s shares have already climbed 29.52%, reflecting steady medium-term gains.

Starboard concluded that Riot is moving toward becoming a major AI and high-performance computing data center operator rather than remaining primarily a Bitcoin miner. While acknowledging that the company has been working on this shift for more than a year, the activist investor stressed that rivals are advancing rapidly in a competitive environment. It maintained that swift execution will be essential and suggested that, if obstacles emerge, Riot’s sizeable power resources could make it an appealing acquisition target amid strong demand for such assets.