Riot Platforms shares jump 13% on $28 billion Anthropic lease

A pivot to AI infrastructure

Riot Platforms saw its shares climb more than 13% following the announcement of a major partnership with Anthropic. The company signed a 15-year lease agreement to provide data center space and power for the AI firm. This deal represents a significant strategic shift for a company that has historically focused on Bitcoin mining.

The agreement covers 910 megawatts of power capacity at Riot's facility in Corsicana, Texas. By providing the physical site and the necessary power infrastructure, Riot is positioning itself as a landlord for the AI era. This move allows the company to capitalize on the growing demand for high-capacity computing power without having to manage the actual hardware.

According to bloomingbit, this specific lease is part of a broader strategy to diversify Riot's income streams. The company expects that most of its future cash flow will come from long-term leases with major players in the AI ecosystem. This transition provides a more predictable revenue model compared to the fluctuations often seen in the cryptocurrency mining market.

The mechanics of the lease

The partnership is structured so that Riot handles the heavy lifting of site development and power delivery. Anthropic will be responsible for owning and operating the actual computing equipment. This division of labor means Anthropic bears the operating costs while Riot secures the long-term rental income from the facility.

The first phase of this project is scheduled for completion in September 2027. Once the infrastructure is delivered, rent payments are set to begin within 60 days of that date. The total capital costs for the project are estimated to be approximately $5.5 billion, reflecting the massive scale of the energy requirements involved.

To fund this expansion, Riot has already begun liquidating some of its assets. The company sold 10,599 Bitcoin during the third quarter to help finance the development of its data center capabilities. Riot is currently weighing debt financing backed by these future lease payments as its primary method for covering the remaining costs.

Shifting away from Bitcoin

As Riot prepares for its new role as an AI infrastructure provider, it is actively scaling back its original mining operations. The company plans to reduce Bitcoin mining at its Corsicana site in stages starting in the summer of 2027. This timeline aligns with the completion of the first phase of the AI data center project.

This transition is a response to the changing needs of the energy sector. While Bitcoin mining was a primary use for the site's power capacity, the demand for AI training facilities offers a different type of long-term stability. By repurposing the infrastructure, Riot can maximize the utility of its existing power grid and real estate holdings.

The company's financial reports show that this shift is already impacting its bottom line. In the third quarter, Riot reported revenue of $181.4 million, which was a 1% increase from the previous year. While the growth was modest, the underlying shift toward AI-related contracts is intended to drive much larger revenue figures in the coming years.

Market context and competition

Riot's success in securing this lease stands in contrast to some of its industry peers. For example, the rival company Hut 8 saw its shares drop by more than 22% in a single day following a weak earnings report. Hut 8 reported third-quarter revenue of $71.1 million, which fell 15% from the previous year and missed market expectations of $75.8 million.

Hut 8 has also attempted to pivot toward AI by securing $7.5 billion in project bonds to develop two data centers. However, unlike Riot, Hut 8 has not yet generated any lease revenue from those projects. The company's current revenue base is no longer its main growth engine, as income remains tied to the specific delivery schedules of its contracted projects.

The contrast between the two companies highlights the importance of finalized contracts in the current market. While both firms are seeking to move into the AI space, Riot's ability to secure a $28 billion lease with a major tenant like Anthropic provides immediate clarity for investors. It demonstrates a successful transition from a speculative mining model to a more traditional infrastructure-as-a-service model.

Looking ahead to 2027

The next few years will be a critical period for Riot as it manages the construction and transition of its Corsicana facility. With the first phase due in 2027, the company must navigate the complexities of large-scale construction while maintaining its current operations. The success of this project depends on meeting the delivery timeline to trigger the commencement of rent payments.

Investors will be watching to see how Riot manages its debt obligations during this period. Since the company is considering debt financing backed by the lease payments, the ability to secure favorable terms will be vital. The $38 billion in total revenue expected from three signed deals provides a significant cushion, but the capital expenditure remains substantial.

Ultimately, this story reflects a broader trend in the energy and technology sectors. As AI models become more complex, the need for massive, reliable power sources becomes a bottleneck for development. Companies like Riot are becoming the essential middlemen, providing the physical foundation upon which the next generation of artificial intelligence will be built.