On Wednesday, bitcoin mining company Riot Platforms announced that it is exploring partnerships in the artificial intelligence and high-performance computing sector as part of its strategy to strengthen its business and generate sustainable revenue streams.
The NASDAQ-listed company stated that it would increase evaluations for potential AI and high-performance computing (HPC) applications at its Corsicana Facility in Navarro County, Texas, citing heightened interest from several potential partners.
Riot’s venture into AI computing capabilities mirrors a growing trend among Bitcoin miners to utilize their substantial power infrastructure and data center expertise for additional revenue opportunities beyond cryptocurrency mining.
This shift occurs as the mining difficulty on the Bitcoin network has reached an all-time high, peaking at 114.7 terahashes when it reached block height 883,502 on February 10, according to data from CoinWarz.
A “confluence” of on-chain indicators suggests that miners are experiencing more “financial strain than before, leading them to seek new sources of revenue,” said Jaehyun Ha, a research analyst at Presto Research, in an interview with Decrypt.
Meanwhile, revenue from Bitcoin mining hardware has significantly declined over the year, dropping to as low as $10.4 a day over an operating margin of 60% for an average ASIC unit such as the Antminer S21+ Hydro, according to data from Hashrate Index.
In conjunction with its AI explorations, Riot appointed three new directors with relevant expertise: Hut 8 Mining CEO Jaime Leverton, former Meta senior engineer Doug Mouton, and real estate investment veteran Michael Turner.
Venturing into AI and high-performance computing is part of Riot’s initiatives to “maximize value” for its “entire portfolio of assets,” Riot CEO Jason Les stated in a press release.
Similar strategic shifts are occurring among other major crypto mining operators. Leverton, who recently joined Riot’s board, previously led her company’s expansion into HPC by acquiring TeraGo’s data center business.
Companies such as Hut 8 and Core Scientific are repurposing their infrastructure for AI workloads, leveraging their existing power access and data centers.
These diversification efforts also aim to reduce dependence on Bitcoin’s price fluctuations while capitalizing on the increasing demand for AI computing resources.
However, the company warned that there is no guarantee that its assets are suitable for AI/HPC conversion or that partnerships can be negotiated on favorable terms.
Nonetheless, Bitcoin mining and other public crypto firms are outperforming the market, with their overall market capitalization increasing by 14% to reach valuations of $108 billion, according to JPMorgan.
Riot also operates Bitcoin mining facilities in Rockdale, Texas, and Kentucky, along with electrical switchgear engineering operations in Colorado.
The company’s stock, which trades on the NASDAQ under the ticker RIOT, is up 0.2% on the day at $11.16, as reported by Google Finance.
Edited by Sebastian Sinclair