Riot Platforms Shares Surge on $28 Billion AI Deal While Hut 8 Revenue Misses

Riot Platforms pivots to AI with large lease agreement

Bitcoin miner Riot Platforms announced a $28 billion lease for an artificial intelligence (AI) data center, causing its stock price to rise more than 13% on Wednesday. The 15-year agreement marks the company's largest deal as it expands its business beyond Bitcoin mining, which is the process of using powerful computers to secure a network and earn digital currency.

While Riot saw gains, its competitor Hut 8 experienced a sharp decline. Shares of Hut 8 fell more than 22% after the company reported lower revenue than analysts expected. Both companies are currently moving away from a total reliance on Bitcoin mining revenue to focus on providing infrastructure for AI companies.

Important numbers from the quarterly reports

• Riot signed a 15-year deal for 910 megawatts of power at its facility in Texas.
• Riot sold 10,599 Bitcoin during the third quarter to help fund its expansion.
• Hut 8's revenue fell 15% to $71.1 million, missing the $75.8 million estimate from analysts.
• Hut 8 has secured $7.5 billion in bonds to finance two major AI data center projects.

Riot shifts strategy toward predictable revenue

Riot CEO Jason Les stated that a year ago, the company's cash flow was tied to the volatile price of Bitcoin. He noted that once current deals are fully active, almost all expected cash flow will come from long-term leases with AI companies. Under the new agreement, Riot will provide the land and power, while the tenant—identified as Anthropic in a quarterly filing—will own and run the computing equipment.

Hut 8 faces challenges during transition

Hut 8 executives attributed their revenue decline to asset sales and lower earnings per Bitcoin mined. CFO Sean Glennan said that the company's older revenue sources are no longer the primary driver for growth. CEO Asher Genoot mentioned that building traditional AI data centers is a complex and expensive process, comparing some current projects to high-level engineering programs that are slow to finish.

What is confirmed

The following facts are supported by company reports and filings:

• Riot's third-quarter revenue was $181.4 million, a 1% increase from the previous year.
• The tenant for Riot's new data center space is Anthropic.
• Hut 8 is carrying higher administrative costs as it transitions its business model.
• Riot's total future contracted revenue from data center leases has reached approximately $38 billion.

Why the shift to AI matters

The move into AI infrastructure allows Bitcoin mining companies to diversify their income. Instead of depending on the fluctuating market price of Bitcoin, these companies are seeking steady, long-term payments from AI firms that need massive amounts of power and space for their computer systems.

What happens next

Riot expects to deliver the first phase of the new project in September 2027, with rent payments starting within 60 days of that delivery. The company also estimates that its Bitcoin mining operations in Corsicana, Texas, may begin to wind down in the summer of 2027. Riot still needs to secure financing for the estimated $5.5 billion in capital costs for the project.

Sources

• Cointelegraph