Starboard emergency $21 billion maneuver to avoid takeover

In a bold strategic move that could redefine the future of crypto infrastructure, activist investment fund Starboard Value has issued an urgent public call for Riot Platforms to aggressively pivot to artificial intelligence and high-performance computing. Starboard claims the move could unlock between $9 billion and $21 billion in value for the Texas-based Bitcoin miner, according to a detailed report obtained by The Block. The fund issued a stark warning that Riot could be at risk of a corporate takeover if it fails to capitalize on the exploding demand for AI infrastructure. This development, emerging from New York on April 10, 2025, signals a potential tipping point at the intersection of crypto mining and next-generation computing.

Starboard’s $21 billion blueprint for the Riot platform

Starboard Value’s analysis provides a detailed roadmap for the Riot platform. The fund closely outlines how Riot’s existing assets, particularly its critical power infrastructure and land holdings in Texas, provide a unique foundation. These assets are therefore ideal for supporting energy-intensive AI and high-performance computing workloads. Starboard’s report suggests Riot holds first-mover advantages in key geographic markets. But the window for action is rapidly closing as competitors accelerate their own plans.

At the heart of the debate is the reuse of strategic assets. Bitcoin mining facilities require reliable and often low-cost power and robust cooling systems. Interestingly, these are the exact same prerequisites for modern AI data centers. Therefore, Riot could theoretically be able to refurbish some of its mining operations. This pivot will enable the company to serve the fast-growing market for AI training and inference. Big cloud providers and AI companies are now competing for capacity, creating lucrative opportunities.

A high-stakes race for AI infrastructure

Looking at the broader picture helps to understand Starboard’s urgency. The global artificial intelligence field is experiencing unprecedented growth, with an insatiable demand for computing power. Additionally, companies like NVIDIA continue to release more powerful chips, which requires more sophisticated data center environments. This creates a perfect storm of demand that incumbent providers will struggle to meet. Riot’s competitors in the crypto mining space have already announced or launched similar diversification efforts, including companies such as Hut 8 and Core Scientific.

Comparative analysis revealed strategic gaps identified by Starboard. The table below summarizes the key differentiators between traditional Bitcoin mining and AI/HPC infrastructure hosting.

This change represents a fundamental business model transformation. Instead of selling computational power to distributed networks, Riot plans to sell secure, powered, and cooled physical space and infrastructure to large enterprise customers. This model typically offers higher profit margins and a more stable source of contract revenue.

Expert analysis of feasibility and risks

Industry analysts note the logic behind Starboard’s proposal, but also highlight significant implementation risks. “Technological crossover is real,” said Dr. Elena Vance, a data center infrastructure expert at the University of Texas. “The electrical and thermal management expertise from mining is directly transferable, but the go-to-market strategy, sales cycle, and client support requirements for enterprise AI are completely different areas that Riot didn’t need to build.”

Additionally, such a pivot requires significant capital. Renovating existing sites or building new AI-enabled facilities requires significant upfront investment. Starboard likely expects Riot to leverage its strong balance sheet, perhaps facilitated by the recent rise in Bitcoin prices, to fund this transition. Activist funds’ track record suggests they may scale back the expansion of Bitcoin mining to drive aggressive capital reallocation and accelerate the buildout of AI.

Takeover threats and strategic imperatives

Starboard’s warning that Riot is a takeover target is more than just a threat. The fund’s report suggests Riot’s undervalued assets, particularly its contracted power positions and developed footprint, make it an attractive acquisition for large technology and infrastructure funds seeking immediate AI capabilities. In today’s market, physical infrastructure with ready access to power is a rare and valuable commodity. Private equity firms and large data center operators are actively seeking such opportunities.

To avoid this fate, Starboard advocates for positive change. The fund’s value creation theme is based on several pillars:

• Monetize power contracts: Transform low-cost power contracts from a cost input into a revenue-generating asset for your customers.
• Asset reuse: Leverage existing land, grid connections, and buildings to accelerate time to market for new AI capabilities.
• Double profit strategy: You have the potential to maintain a scaled down and efficient Bitcoin mining operation and form a hedge while growing your AI hosting business.

This strategy is in line with the growing trend of “computing diversification” within the cryptocurrency industry. As Bitcoin mining becomes more competitive and regulated, miners are looking for adjacent, high-margin businesses that leverage their core competencies.

conclusion

Starboard Value’s public campaign for its Riot Platforms AI axis marks a significant turning point for the company and the broader cryptocurrency infrastructure sector. The potential for up to $21 billion in value to be created highlights the enormous financial stakes in the race to build AI capabilities. For Riot, the path forward involves complex strategic decisions. Either continue our focus on Bitcoin mining or embark on a capital-intensive transformation to become a major player in high-performance computing. Starboard’s clear message is that doing nothing is the riskiest option of all, and that Riot’s valuable assets could be expropriated by a more aggressive acquirer. The coming months will reveal whether Riot executives accept this urgent call to action or chart a different course in the rapidly evolving landscape of advanced computing.

FAQ

Q1: What is Starboard Value and why does its opinion matter?
Starboard Value is a prominent activist investment fund known for acquiring equity in companies and driving strategic, operational, and governance changes to unlock shareholder value. That involvement often signals to the market that a company’s assets may be undervalued or mismanaged, putting significant pressure on the board and management to take action.

Q2: How can Bitcoin mining companies like Riot Platforms realistically pivot to AI?
Pivoting is possible due to the need for shared infrastructure. Both Bitcoin mining data centers and AI data centers require reliable large-scale power, advanced cooling systems, and secure, scalable facilities. Rather than run only its own mining rigs, Riot could reuse existing sites and power contracts to host other companies’ AI servers.

Q3: What are the key risks associated with Riot making this strategic shift?
Key risks include the high capital expenditures required for facility refurbishment and new construction, lack of experience with enterprise sales and service models for AI customers, potential execution delays, and the opportunity cost of reducing focus on the core Bitcoin mining business during a potentially bullish crypto market cycle.

Q4: Who are Riot’s main competitors in this potential new AI infrastructure space?
Competitors will include established data center REITs such as Digital Realty and Equinix, specialized AI infrastructure companies, and other cryptocurrency miners such as Hut 8 and Core Scientific that are diversifying into high-performance computing. Large cloud providers (AWS, Google, Microsoft) are both potential customers and competitors.

Q5: What if Riot Platforms ignores Starboard’s advice?
If Riot ignores the advice and continues with its current strategy, Starboard could escalate the activities of its activists. This may include proposing new board members, initiating proxy contests, or rallying other shareholders. If the stock price remains depressed due to a perceived missed opportunity, as Starboard warned, the company could certainly become an attractive takeover target for companies seeking infrastructure assets.