Activist investor Starboard Value has made a large investment in bitcoin miner Riot Platforms (RIOT) and is pushing for changes in the company’s business model, <a href=”httpss://www.wsj.com/finance/currencies/activist-starboard-value-takes-stake-in-bitcoin-mining-company-riot-82b3796f?mod=hp_lead_pos10″ target=”_blank”>The Wall Street Journal reported</a>, citing people familiar with the matter.

Starboard has been pushing Riot to convert some of its bitcoin mining sites into data centers that can host machines to enable high-performance computing (HPC) for big tech companies, according to the story. Riot is currently a “pure-play” bitcoin miner that gets its revenue only from mining bitcoin, as opposed to some other peers, such as Core Scientific (CORZ), which has dedicated a significant amount of its facilities to HPC and artificial intelligence computing.

“Riot regularly speaks with our shareholders and values their feedback,” a spokesperson for the firm told CoinDesk in an emailed statement. “We have engaged with Starboard on multiple occasions and welcome their input on the company. We are committed to creating value for all shareholders, and we look forward to constructive dialogue with Starboard on ways to achieve this shared goal.”

For many years, publicly traded mining companies were considered one of the main ways for institutional investors to get exposure to bitcoin. This was good for their stock prices, which soared during the 2020-21 bull market. The 2022 crypto winter, though, decimated the sector and most of the names haven’t come anywhere close to recovering the previous bull market highs even though bitcoin has soared past $100,000.

The industry has faced an intense profit squeeze following the <a href=”httpss://www.coindesk.com/learn/bitcoin-halving-explained” target=”_blank”>bitcoin halving</a> earlier this year (which slashed mining profitability), leading some miners to look for ways to diversify their revenue sources. Still, nothing was a game change until Core Scientific signed a multi-billion dollar deal with a hyperscaler— a firm operating large-scale data centers for cloud computing and AI. This changed the sentiment and brought large investors back into the sector.

However, some firms, including Riot, remained pure-play miners, largely ignoring the trend of turning some of their sites into HPC computing. This, in turn, led to their underperformance relative to others in the industry. Starboard’s move would mark the first time a traditional activist investor is taking a position in a publicly traded miner to push them to diversify their revenue into data centers.

Riot hasn’t been completely opposed to this trend, as its CEO Jason Les has said that the company has been <a href=”httpss://medium.com/@BlockchainLycan/riot-platforms-eyes-ai-partnerships-with-blue-chip-companies-amid-financial-losses-f1f26954514f” target=”_blank”>considering</a> deals with these large tech companies. However, it hasn’t announced anything so far that would suggest a potential deal is in the works, while other miners forge ahead with AI and HPC deals.

Most recently, Michael Novogratz’s Galaxy Digital said it <a href=”httpss://www.coindesk.com/business/2024/11/07/michael-novogratzs-galaxy-looks-to-turn-bitcoin-mining-into-ai-computing-as-revenue-falls” target=”_blank”>signed</a> a non-binding deal with a U.S.-based hyperscaler firm to turn all its 800 megawatts of mining capacity into hosting high-performance computers. Meanwhile, bitcoin miner IREN (IREN) saw its shares surge after saying it had <a href=”httpss://www.coindesk.com/business/2024/11/27/bitcoin-miner-iren-surges-on-renewed-ai-interest-possible-btc-dividend-payment” target=”_blank”>received</a> interest from a trillion-dollar hyperscaler firm and Hut 8 (HUT) was <a href=”httpss://www.coindesk.com/business/2024/12/12/hut-8-rises-12-pre-market-amid-social-media-talk-of-partnership-with-meta” target=”_blank”>speculated</a> to have been building a data center with Facebook owner Meta Platforms (META).

Riot’s stock rose as much as 11% in early Thursday trading and were higher by 6% at press time. The shares have fallen nearly 30% this year, while CoinShares Valkyrie Bitcoin Miners ETF (WGMI) rose 40%.