Bitcoin miner Riot’s shares jump 8% after expanding AMD data center deal, signaling AI pivot
AMD’s expansion and improved financing terms highlight Riot’s shift beyond bitcoin mining and strengthen confidence in its growing data center business.
What to know:
- AMD doubled its capacity at Riot’s Texas site to 50MW, with an option to expand to 150MW total, a deal expected to generate about $636 million over 10 years.
- Riot secured better credit terms, lowering its rate to 6.15% and reducing pledged BTC collateral, a sign of growing lender confidence in its non-mining business.
- Shares are up 8% on Friday.
Riot also secured improved terms on its $200 million bitcoin-backed credit facility with Coinbase, lowering the rate to a fixed 6.15% from 8.3% and releasing 1,544 of pledged collateral bitcoin, signaling growing lender confidence in its expanding data center business.
Together with the AMD deal and improved credit terms, investors are paying a premium for the stock. “Market pricing in lower cost of capital as the expanded AMD deal drives lender confidence,” said Matthew Sigel, head of digital assets research at VanEck.
Riot was one of the last few ‘pure play’ mining companies left that didn’t get into hosting AI computing, while others opened up their data centers to move away from mining. Until recently, activist investor Starboard started to urge the management to accelerate its transition from bitcoin mining to an AI infrastructure provider.
The move to expand its data center business to host AI computers appears to be paying off for the Castle Rock, Colorado-based company.
