Activist funds have started pressuring companies that do not convert some of their operations into artificial intelligence (AI) data centers, despite facing profitability deterioration after this year's Bitcoin halving.
According to the Wall Street Journal (WSJ) on the 12th (local time), the activist fund Starboard Value recently told the management of Bitcoin mining company Riot Platforms, in which it has invested, to convert some of their coin mining computing facilities into hyperscaler (companies owning large-scale data centers) or large data center customer facilities.
Riot Platforms' stock price has fallen about 24% this year through the 11th, contrary to Bitcoin, which is hitting all-time highs. This is due to the Bitcoin halving in April, which cut the total daily mining capacity in half, increasing mining difficulty and causing profitability deterioration.
On the other hand, AI data centers are facing a situation where supply cannot keep up with demand. This is because building new data center facilities and securing power require enormous capital and time.
Cryptocurrency companies operate large data centers for mining, so it is not difficult for them to convert their business segments into AI data centers. They have secured high-performance computing (HPC) infrastructure, including NVIDIA graphics processing units (GPUs), and large-scale power supplies.
Nevertheless, there is analysis that the activist fund publicly pressured Riot Platforms for not promptly converting its business. In response, Riot Platforms told WSJ, "The company is committed to creating shareholder value and will constructively consult with Starboard to achieve this common goal." Accordingly, Riot Platforms' stock price closed about 5% higher on the New York Stock Exchange that day.
Large mining companies have already turned their facilities toward AI data center leasing businesses. Core Scientific recently signed a facility lease contract with AI cloud provider CoreWeave. Bit Digital, Iris Energy, and others are also actively involved in this area.
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