Riot Platforms Signs $9 Billion Deal with Anthropic to Power AI Computing

Bitcoin mining companies are turning to artificial intelligence (AI) as a way to diversify their revenue streams and stay profitable in a struggling cryptocurrency market. One such company, Riot Platforms (RIOT), has signed a $9 billion compute deal with Anthropic, making it one of the largest AI deals in the industry.

The transition from Bitcoin mining to AI computing is not without its challenges. Existing hardware used for Bitcoin mining does not work for AI, so companies need to secure graphics processing units (GPUs) and other specialized equipment. They also require new personnel with expertise in operating an AI data center, as well as different power management systems.

The potential rewards are immense, however. For Riot, the deal with Anthropic could translate into an additional $7 billion of revenue over the next 20 years. The company's existing data center division generated only about $23 million in revenue from its data center division in the second quarter, but this is expected to ramp up quickly.

The valuation of these stocks is based on their potential compute capacity and how much they can charge for it. Companies like Riot and Nebius are racing to bring online as much power as possible to meet growing demand from AI companies like Anthropic and OpenAI.