Riot Platforms CEO Open to AI Opportunities with Right Partner

In a recent interview with analysts at research and brokerage firm Bernstein, Jason Les, CEO of bitcoin miner Riot Platforms, stated that the firm is open to considering AI opportunities if the right partner and deal structure arise.

Les highlighted Core Scientific’s hosting deal with AI Hyperscaler CoreWeave, expected to generate over $3.5 billion in revenue across a 12-year period. Despite this, Les expressed skepticism about the likelihood of similar deals for Riot.

He underscored the benefits of Riot’s Texas-based facilities, such as its 750MW capacity facility in Rockdale and the world’s largest 1GW capacity bitcoin mining operation in Corsicana. Both are strategically located near urban centers like Austin and Dallas, providing access to talent and efficient infrastructure, including low power costs and minimal network latency.

However, Les clarified that while the company is open to AI, it does not represent a significant shift for Riot. He stressed that the firm won't chase the AI trend recklessly, noting the need for AI-specific equipment, which differs from the ASIC machines traditionally used for bitcoin mining.

> “I think the Core Scientific deal is fantastic; if a similar deal came along for us, we would be very interested. But, we are not announcing a pivot just for the sake of it,” Les said.

This statement comes as the mining industry is divided, with some firms focusing exclusively on bitcoin mining and others exploring AI data center hosting services.

Sustaining Bitcoin Mining Roots

Riot will maintain its focus on bitcoin mining. Les pointed out that the entry of new manufacturers like Jack Dorsey’s Block, Bitdeer, and Auradine has made bitcoin mining more economically attractive by reducing reliance on dominant supplier Bitmain.

> “Historically, we have focused on bitcoin mining, and right now, our plans continue in that direction because we can execute this at a very efficient cost,” Les added.

With the strategy in place, Riot can invest aggressively, acquiring new pipeline equipment locked in at prices for up to 100 EH/s, three times its current mining capacity.

Bernstein analyst Gautam Chhugani believes Riot is undervalued based on its power assets, trading at around $800,000 per MW, compared to the miner average of $2.1 million per MW. He projects that at Bernstein’s bitcoin price forecast of $200,000 by the end of 2025, Riot's EBITDA could rise to $1.1 billion. Chhugani rates Riot stock as outperform, projecting a target of $22, far above its current price of $7.85.

Diverging Miner Strategies

While Riot’s stock rose 17.3% over the past month, it remains down 54% year-to-date. It has lagged behind competitors diversifying into AI, like Core Scientific, IREN, and TeraWulf. However, proponents of bitcoin mining argue that the quicker returns from traditional mining make it a more attractive option amid potential future price rises.

Unlike AI diversifiers who often sell inventory, Riot retains about 10,000 BTC on its balance sheet, valued at approximately $630 million.

> “In the next 100 years, there will be just over 2 million bitcoin left to mine. As a bitcoin company, we want to maximize that opportunity. We believe in the long-term value of Bitcoin,” Les explained.

Earlier this year, Riot attempted a hostile takeover of rival Bitfarms, but the situation ended in a settlement that limits Riot to acquiring no more than 20% of Bitfarms without board consent. Chhugani maintains a long position in various cryptocurrencies, and certain Bernstein affiliates serve as market makers for Riot Platforms' debt.