Riot Platforms to Explore AI Use for 600 MW Power Capacity

Riot Platforms (ticker RIOT), one of the largest publicly traded bitcoin miners, is launching a formal process to evaluate the feasibility of directing the approximately 600 megawatts (MW) of remaining power capacity at its Corsicana, Texas facility toward artificial intelligence (AI) and high-performance computing (HPC) uses.

Bitcoin miners have increasingly diversified their operations, moving beyond pure crypto mining toward hosting infrastructure for AI and HPC, especially after Bitcoin’s fourth halving in April 2024.

Riot has been engaged in preliminary discussions with potential AI/HPC partners for several months and is now expanding outreach in parallel with this analysis. Currently, the company utilizes 400 MW of capacity for Bitcoin mining at Corsicana and has up to one gigawatt of total capacity approved by the Electric Reliability Council of Texas.

In conjunction with this process, Riot is halting the previously announced 600 MW Phase II Bitcoin mining expansion at the Corsicana facility. Consequently, the company is reducing its forecast for total self-mining hash rate capacity growth and associated capital expenditures for 2025, with further updates expected as this review process progresses.

“Our focus has always been on maximizing the potential of our assets and ensuring that any agreement we enter into with an AI/HPC counterparty would be the result of an informed, thorough process that puts the best interests of all our shareholders first,” Riot CEO Jason Les stated in a press release.

Riot had initially expected to end 2025 with a total hash rate capacity of 46.7 EH/s but now anticipates an end-of-year figure of 38.4 EH/s, with projected capital expenditures at the Corsicana facility reduced by $245 million.

‘This Announcement is Encouraging,’ Says JPMorgan

The move is considered “encouraging” and could mark the beginning of a “re-rating journey” for Riot Platforms, according to analysts at JPMorgan and Bernstein.

Last month, activist investor Starboard Value reportedly pressured Riot to convert some bitcoin-mining facilities into capacity for hyperscalers, which operate large-scale data centers designed for massive computing power and storage.

“Two factors are crucial in determining if a bitcoin mining site can be used for AI/HPC workloads: 1) scale and 2) location,” JPMorgan analysts wrote in a note to clients. “Potential AI partners need at least 50 MW of capacity, and data centers for high monetization, low-latency AI applications must be within ~100 miles of a major metro area.”

Among the bitcoin miners in JPMorgan’s coverage, only Riot’s Corsicana and Rockdale facilities have 500 MW or more of capacity, with both lying within vital locations.

Analysts from JPMorgan noted, “This announcement is encouraging, and is something we have been lobbying for months to more aggressively explore possibilities for HPC at Corsicana.” The firm maintains an “overweight” rating on RIOT stock with a $16 price target.

Bernstein analysts believe Riot’s strategic shift towards AI at the Corsicana site could mark the start of a re-rating journey, after Riot significantly underperformed compared to AI-focused miners like CORZ in 2014. Riot’s stock fell by 34% while CORZ gained 308% last year. Bernstein anticipates a market trend reversal for Riot.

Bernstein also finds RIOT’s stock trading “extremely cheap” based on its operating business ($1.2 million/MW on total capacity), with potential for re-rating due to the pivot towards AI.

They hold an “outperform” rating and a $22 price target on the stock. As of publication, Riot Platforms’ stock was down 3.7%, trading around $12.90 per share, having appreciated approximately 21% over the past year.