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Shares of Riot Platforms (Nasdaq: RIOT) were moving higher Friday after the news broke that the Bitcoin mining firm could be expanding operations into AI data centers.

The Wall Street Journal reported Friday that Starboard Value, an activist investor, had recently taken a significant stake in Riot Platforms, the largest U.S. Bitcoin miner in the U.S. by number of employees.

The Journal article, citing people familiar with the matter, did not indicate the dollar value of the stake. However, it did say that Starboard was in discussions with Riot about various things, including converting some of its Bitcoin mining facilities into high performance computing AI data centers.

Riot Platforms said in a statement to the Journal that it is “committed to creating value for all shareholders, and we look forward to constructive dialogue with Starboard on ways to achieve this shared goal.”

The stock surged some 10% on the news Friday, rising to a high of $13.53 per share, before settling back to around $13.15 per share, up around 6%.

AI data centers, a natural fit

While details on the potential AI data center plan are not clear, it is a logical pivot that some of Riot’s competitors have made.

Earlier this year, Bitcoin miner Core Scientific (Nasdaq: CORZ), struck a deal with AI hyperscaler CoreWeave. The deal involved converting some of its infrastructure to host CoreWeave’s high-performance computing operations. Core Scientific modified multiple existing sites to host CoreWeave’s NVIDIA GPUs.

Since that announcement in early June, Core Scientific’s stock has been on fire, jumping about 224% from under $5 per share to around $15.80 per share.

Just last month, Core announced that it was converting its Bitcoin mining data center in Denton, Texas to an AI data center.

“Denton has been home to one of our most advanced data centers, and now we expect it will host one of the largest GPU supercomputers in North America, powering artificial intelligence,” Adam Sullivan, Core Scientific CEO, said on November 20.

Bit Digital and Hut 8 are two other Bitcoin miners that have expanded into AI data centers.

AI data centers, which are massive facilities that companies and enterprises use to process complex AI computing tasks, have been in high demand with the explosion of AI technology. And the need will only continue to grow, as the AI boom is just beginning and won’t peak for at least another decade.

Bitcoin miners like Riot Platforms also use massive computing power to mine for Bitcoin and cryptocurrencies, so the infrastructure is there to convert them to handle AI supercomputing.

Buying more Bitcoin

Also, this week, Riot Platforms made a big investment in Bitcoin. On Tuesday, the company announced that it had offered some $525 million in convertible notes to acquire additional Bitcoin and for general corporate purposes.

Then on Friday, on X, Riot Platforms posted that, with the proceeds from the convertible bonds, acquired 5,117 Bitcoin at an average price of $99,669 per coin.

That boosted Riot’s total to 16,728 Bitcoin, currently valued at approximately $1.68 billion based on the $100,303 market price of Bitcoin as of Friday.

Riot stock is down about 16% YTD, even with today’s gains. But analysts are bullish on the stock, setting a median price target of $17 per share, which would suggest a 30% increase. Investors should note that the trailing P/E is high at 80, but the forward P/E is more reasonable at 20.

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