Key Takeaways
- Riot’s Bitcoin mining profits are declining sharply due to lower prices.
- Activist investor Starboard urges Riot to accelerate its shift to AI data centers.
- Many Bitcoin miners are pivoting to AI hosting for steadier, higher margins.
Riot Platforms, one of the largest U.S. Bitcoin mining companies, is under growing pressure to pivot to Artificial Intelligence (AI).
This trend has gained momentum amid declining mining profitability.
The company owns large power sites in Texas that could be repurposed for AI computing instead of mining rigs.
Activist Starboard Urges Faster Switch to AI Data Centers
Riot’s profits from Bitcoin mining have been declining, and a major investor is pushing the company to move faster into AI data centers.
On Feb. 18, activist investor Starboard Value sent a letter to Riot.
Starboard, Riot’s fourth-largest shareholder at the end of 2025, wants the company to accelerate its shift away from pure Bitcoin mining.
Starboard highlighted Riot’s two large Texas sites—Corsicana and Rockdale—which together offer 1.7 gigawatts of power.
The investor said these sites are ideal for AI and high-performance computing.
If Riot leases power and space the way other companies have, it could earn over $1.6 billion in annual profit.
Starboard emphasized that Riot must act quickly to seize this opportunity before competitors do.
Riot CEO Jason Les said last summer that leasing data center space yields higher profits and can boost stock prices more than mining Bitcoin.
The company has begun exploring AI applications and recently signed a deal with chipmaker AMD.
Mining Profitability Declines
Bitcoin prices dropped sharply in late 2025 and early 2026, reducing mining profitability.
Riot’s cost to mine one Bitcoin—including all expenses— has reached around $89,000.
Meanwhile, Bitcoin trades between $60,000 and $70,000, leaving no room for profit.
In November 2025, Riot mined 428 Bitcoins, down 14% from the prior year.
In December, it mined 460 Bitcoins, still 11% lower than December 2024.
To raise cash, the company sold a record 1,818 Bitcoins in December for $161.6 million.
Wall Street expects Riot to report a loss of $0.22 per share for Q4 2025.
Mining profitability across the industry hit a 14-month low in January 2026 due to lower Bitcoin prices, higher power costs from winter storms, and tougher competition.
Even with a strong Q3 2025—$180 million in revenue and $104 million in net income—the recent Bitcoin slump has reversed gains.
Industry-Wide Pivot: Many Mining Companies Turn to AI
Riot is not alone. At least eight other publicly traded Bitcoin miners are shifting partially or fully to AI data centers.
The reason is simple: AI customers pay steady, high rents with profit margins of 80% to 90%, while Bitcoin mining profits swing wildly with crypto prices.
Key firms making the shift include:
- Core Scientific: signed large AI hosting deals; stock soared.
- IREN: deal with Microsoft for GPU cloud services worth up to $9.7 billion.
- Cipher Mining: contract with Amazon Web Services.
- TeraWulf, Bitfarms, CleanSpark, MARA Holdings, Hut 8, and Bit Digital: all launched AI hosting projects.
Some, like Bitfarms, plan to cease Bitcoin mining entirely by 2027.
Others are combining both businesses but expect AI to become the main revenue source.
In 2025, these companies signed contracts totaling over $65 billion for AI and computing.
By late 2026, mining may constitute less than 20% of revenue for those that pivoted.
The move makes sense: miners already have cheap power, land, and buildings suited for heavy computing.
With AI demand surging, this strategy transforms volatile mining sites into stable, high-value data centers.
Riot now faces a clear choice: continue with shrinking mining profits or join the growing group betting on AI.
Starboard’s push may accelerate this decision in the coming weeks.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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