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bitcoin miner riot platform has signed a 20-year, $9 billion computing deal with Anthropic, CNBC’s David Faber confirmed.
The deal will lease 191 megawatts at Riot’s Rockdale, Texas, computer campus, giving Anthropic access to scarce grid-connected power as demand for computing power that can be used to deliver artificial intelligence surges, and moves Riot from Bitcoin miner to AI infrastructure landlord. The stock initially soared more than 20% in reaction, but has since given up almost all of its gains.
The deal is expected to generate $9.1 billion in revenue over the 20-year term, increasing to approximately $16.1 billion if the deal is extended for two additional five years. This follows an existing agreement with Riot. advanced micro deviceThis means Riot now has a “two-tenant campus that brings in $9.8 billion in contracted data center revenue,” Compass Point analyst Michael Donovan said in a note Tuesday.
Bitcoin mining stocks once looked like a way to gain leveraged exposure to the price of Bitcoin. Bitcoin. However, with the growth of AI and a long period of low crypto prices, most publicly traded Bitcoin miners are increasingly viewed by investors as owners of digital infrastructure rather than Bitcoin producers, given their power capacity, data center assets, and energy contracts.
The pivot from Bitcoin miners to AI began to take shape in 2022, the last time crypto prices fell, but typically among small and medium-sized enterprises during sustained declines in Bitcoin prices, meaning the price of Bitcoin is below the costs of mining, such as electricity, hardware, and operating costs.
Falling prices, increased competition, and reduced mining incentives due to Bitcoin’s once-every-four-year halving mean mining companies will see their profits squeezed and end up operating at a loss.
Bitcoin miners turned AI infrastructure providers offer investors exposure to AI demand without having to bet on which model or application will ultimately win. Because all AI companies require the same increasingly scarce power, computing power, and physical equipment.
crypto mining, hut 8 and terra wolf It is one of what has become known as a hybrid Bitcoin miner. Riot too Mara Holdings and clean sparkremains primarily a pure minor in the sector.
That scarcity could become even more valuable as the Electric Reliability Council of Texas, known as ERCOT, scrutinizes new power projects, said Compass Point analyst Donovan.
“While ERCOT’s increased oversight may slow the progress of ongoing speculative projects, it will not reduce tenant demand for large power blocks in the short term,” he said. “If anything, the lack of green-light capacity should increase its strategic value,” he said of Riot stock. “Therefore, we reiterate our buy rating and maintain our $29 price target.”
