In a letter sent on February 18 activist investor Starboard Value LP called on Riot Platforms to urgently execute its transition from bitcoin mining to a premier artificial intelligence and high-performance computing (AI/HPC) data center provider.
Summary
- Starboard Value released a high-stakes letter urging Riot Platforms to capitalize on a massive $21 billion opportunity in artificial intelligence.
- The recent AMD deal is seen only as a โproof of conceptโ; the activist demands larger, investment-grade tenants to bridge the valuation gap with peers.
- The shareholder warned that if Riot cannot execute quickly, its rare power assets make it a prime acquisition target for tech giants.
Starboard: Riot Platforms sitting on a multi-billion dollar AI payday
โWe believe Riot is on its way to a transformation from a bitcoin miner to a best-in-class AI/HPC
data center company,โ Starboard said in the letter.
While praising recent governance improvements, Starboard warned that โtime is of the essenceโ as the company continues to underperform its peers.
Starboard highlighted Riot Platformโs โmassiveโ opportunity, centered on its 1.7GW of available power across two flagship sites in Corsicana and Rockdale, Texas. As the AI industry faces severe power constraints and multi-year grid interconnection delays, Starboard contends that Riotโs already-powered sites are among the most attractive in the nation.
The investor pointed to Riotโs January 2026 deal with Advanced Micro Devices (AMD) as a โpositive signalโ and proof of concept. Under the agreement, AMD committed to 25MW which is expected to generate $311 million in revenue over a 10-year term with an 80% EBITDA margin.
Starboardโs analysis suggests Riot is also significantly undervalued. If Riot successfully monetizes its remaining 1.4GW of capacity in line with recent industry transactions, it could generate over $1.6 billion in annual EBITDA. Using valuation multiples of 12.5x to 20x, Starboard estimates the AI/HPC business alone could contribute between $9 billion and $21 billion in equity value, implying a share price of $23 to $53.
Despite these prospects, Starboard Managing Member Peter Feld noted that Riotโs stock has materially lagged behind peers who signed larger AI deals earlier. The letter urged Riot to focus on โhighest-qualityโ investment-grade tenants and warned that if management cannot execute quickly, the company should consider itself a candidate for consolidation due to the scarcity of its power assets.
โRiot is now positioned to focus on executing its AI/HPC strategy,โ Feld wrote, โbut it must execute with excellence and urgencyโ.
