February 18, 2026
Riot Platforms, Inc.
3855 Ambrosia Street, Suite 301
Castle Rock, CO 80109
To: Jason Les, Chief Executive Officer
Benjamin Yi, Executive Chairman
CC: Board of Directors
Dear Jason and Benny,
We appreciate the conversations we have had with you over the past year, during which time Riot Platforms, Inc. (“Riot” or the “Company”) has embarked on a meaningful transformation. A little over a year ago, Riot launched its high-performance computing and artificial intelligence (“AI/HPC”) data center strategy. Over that same period, Riot has taken steps to begin improving corporate governance and reducing expenses. To be sure, improved governance and overhead are critically important, and there remains more work to be done, but we and other investors are highly focused on Riot achieving a large-scale and value-creative AI/HPC transaction in the near term. The recently announced transaction with Advanced Micro Devices, Inc. (“AMD”) is a positive signal that validates our view of the intrinsic value of Riot’s key sites, but it is a small validation transaction and we, like you, expect to see much larger progress.
As shown below, Riot’s stock price performance has notably lagged its peers that have signed large-scale AI/HPC transactions.¹
¹ Bloomberg. Indexed price chart from January 2, 2024, to February 13, 2026. Starboard has viewed these companies as a relevant peer group for comparing Riot’s stock price performance. Starboard believes these companies provide an appropriate peer comparison. The chart is inherently subjective, and because not all possible peer companies are listed, the comparisons made herein may differ materially if other companies were included.
Riot vs. AI/HPC Peers – Indexed Stock Price Performance Since January 2024¹
While this underperformance is disappointing, we believe Riot is better positioned than its peers to achieve higher-quality transactions. Time is of the essence, and a renewed sense of urgency is needed to achieve more material transactions.
Riot’s Significant AI/HPC Opportunity
The current data center market is exciting. AI/HPC companies have announced ambitious plans to scale their capacity exponentially over the coming years. Perhaps the greatest bottleneck to this buildout is securing power access at sites suitable for high-quality data centers. This problem will only worsen, with interconnection queues at major grids now stretching to multiple years and some grid operators, including ERCOT where Riot’s sites are located, exploring potential plans to limit new data center power allocations. This only makes Riot’s powered sites more valuable.
AI/HPC companies are increasingly looking at cryptocurrency miners as an attractive source of near-term power capacity. In fact, from August 2025 through year-end, four cryptocurrency miners announced AI/HPC transactions totaling approximately 1.4 GW of capacity, at an average lease rate of $1.80 per megawatt of critical IT load capacity (“CIT MW”).² We believe the power markets have continued to strengthen since many of these transactions were signed.
Against this highly attractive backdrop, we believe Riot has a significant value-creation opportunity. Its two primary sites – Corsicana, outside Dallas, and Rockdale, outside Austin – are two of the best sites in the United States for AI/HPC data centers, with a combined 1.7 GW of fully available power. Based on our diligence, we believe there are no material obstacles to building world-class data centers at these sites, and because they sit on the outskirts of major metropolitan markets, they are well-suited for AI training, inference, edge computing, or virtually any data center application a customer could want. Due to these attractive characteristics, we believe Riot’s sites are superior to most of the sites in the announced transactions.
Riot announced its first data center transaction on January 16, 2026 with AMD, proving the Company’s ability to attract a highly sophisticated, investment-grade tenant. In the initial transaction, AMD committed to lease 25 CIT MW, with the ability to expand to 200 CIT MW. The initial 25 MW lease is expected to generate $311 million in revenue over the first 10-year term with approximately 80% EBITDA margins. This equates to $1.24 million in revenue per CIT MW per year, and $1.0 million of EBITDA. Critically, the Company can retrofit existing infrastructure at Rockdale with a capital expenditure (“capex”) of just $3.6 million per CIT MW, significantly below prior AI/HPC transactions, resulting in an attractive yield.³ This capacity is expected to be delivered in May of this year, an impressive feat that we hope demonstrates the execution capabilities of Riot’s new data center team.⁴
² WULF, CIFR, HUT and APLD company filings.
³ RIOT, WULF, CIFR, HUT company filings.
⁴ Riot Platforms January 16, 2026 business update.
This is only the beginning. Riot still has 1.4GW of total capacity to monetize, placing it in an enviable position—but it must execute with excellence and urgency.⁵ The report argues that Riot should be able to attract high-quality tenants to its Tier 3 data centers on terms similar to or better than the peer transactions announced in late 2025.⁶ If Riot can monetize its power capacity at prices comparable to recent comparable transactions, the author believes it can achieve annualized EBITDA of over $1.6 billion.⁷
Although there is a wide range of estimates for appropriate valuation multiples for AI/HPC data center companies, the report believes the best starting point is publicly listed data center REITs, which trade at approximately 22x NTM EBITDA.⁸ On one hand, the report expects Riot's data center business will trade at a modest discount to REITs due to its concentrated business, limited operating history, and lack of REIT structure and tax advantages, at least initially.⁹ On the other hand, Riot will be entirely focused on AI/HPC—the most exciting part of any data center operator's asset portfolio—and may have a higher proportion of investment-grade tenants due to the appeal of its sites to hyperscalers.
Considering Riot's estimates of the cost to build that capacity and applying a discount to data center multiples for valuation, the report believes the AI/HPC data center contribution from Corsicana and Rockdale to equity value could range from $9 billion to $21 billion, far exceeding Riot's current market capitalization. Including Riot's net cash balance, this implies a per-share value for Riot of between $23 and $53, even without considering the value of its Bitcoin mining or engineering business or its NOL carryforwards.¹⁰
⁵ Note: Although the 75 CIT MW AMD expansion option will be executed on the same terms as the initial 25 CIT MW transaction, the 100 CIT MW ROFR does not have to be executed on the same terms as the initial transaction. For ease of presentation and to simplify this letter, the report assumes the entire 200 CIT MW is monetized on the terms of the initial transaction.
⁶ Including TeraWulf's transaction with Fluidstack/Google, Cipher Mining's transactions with Fluidstack/Google and AWS, and Hut 8's transaction with Fluidstack/Google.
⁷ Starboard estimates; WULF, CIFR, HUT company filings; Riot Platforms January 16, 2026 business update. All estimates are based on information obtained from reliable sources and incorporate certain assumptions. Such information and assumptions may ultimately prove to be inaccurate.
⁸ Reflects the average of Bloomberg estimates for DLR and EQIX as of February 13, 2026.
⁹ However, according to its FY24 10-K filing, Riot does have approximately $1.2 billion in NOLs that can offset taxes on operating profits.
¹⁰ Riot has 162 gross MW of Bitcoin mining operations in Kentucky, which the report assumes will not be converted to AI/HPC; there is also approximately 1GW of Bitcoin mining capacity at Rockdale and Corsicana that can be phased out over time, generating cash.
Corsicana Rockdale - Non-AMD Rockdale - Full AMD Total RIOT
Total Capacity (Gross MW) 1,000 1,700
(÷) PUE 1.50 1.50 1.50 1.50
Critical IT Load Capacity (MW) 1,133
(×) Annual Revenue per MW ($M) $1.80 $1.80 $1.24 $1.70
AI/HPC Revenue ($M) $1,200 $480 $249 $1,929
(×) AI/HPC Margin 85% 85% 80% 84%
AI/HPC EBITDA ($M) $1,020 $408 $199 $1,627
Riot AI/HPC EBITDA Contribution⁷
Because Corsicana and Rockdale are in prime locations and their use extends beyond training, the report believes they are particularly attractive to hyperscalers, in contrast to some peer transactions with lower-quality, non-investment-grade tenants. The report argues that Riot should focus on the highest quality tenants, not the highest nominal lease rates, which should enable Riot to efficiently finance its construction and achieve the highest transaction multiples once the data centers are operational.
In such a dynamic and rapidly evolving AI/HPC demand environment, Riot must urgently seize this extraordinary opportunity.
Improving Riot's Governance and Operational Efficiency
Historically, the report believes Riot's trading discount was partly due to governance issues and operational inefficiencies. Shortly after the report's initial engagement, Riot began taking steps to address these issues, but more effort is needed.
In early 2025, Riot appointed three new directors with experience in data center development and real estate operations. Subsequently, in June 2025, Riot hired a Chief Data Center Officer and began building its data center team, significantly enhancing Riot's ability to execute high-quality data center transactions, as evidenced by the recently announced transaction with AMD.
Riot has also improved its operational efficiency. Its mining operations uptime improved from approximately 69% in September 2024 to 86% in the third quarter of 2025; it resolved the long-standing litigation with Rhodium in March 2025, eliminating ongoing costs and freeing up 125 MW of total capacity for development in the process, and its subsidiary ESS Metron generated $19 million in revenue with a 28% gross margin in the third quarter of 2025.¹¹ For the AMD portion, total capex per CIT MW is $3.6 million, and for the remaining capacity, it is $11.5 million per CIT MW, reflecting the midpoint of Riot's disclosed range of $10 million to $13 million.¹² Company filings and Starboard estimates. All estimates are based on information obtained from reliable sources and incorporate certain assumptions. Such information and assumptions may ultimately prove to be inaccurate.
Riot AI/HPC EBITDA
$1,627
$1,627
$1,627
$1,627
(x) Valuation Multiple
12.5x
15.0x
17.5x
20.0x
AI/HPC Enterprise Value Creation
$20,338
$24,406
$28,473
$32,541
(-) Capex
($11,453)
($11,453)
($11,453)
($11,453)
AI/HPC Equity Value Creation
$8,885
$12,952
$17,020
$21,087
(+) Net Cash Position
$1,005
$1,005
$1,005
$1,005
Pro Forma Equity Value
$9,889
$13,957
$18,024
$22,092
(÷) Diluted Shares Outstanding
Pro Forma Share Price
$23.55
$33.23
$42.92
$52.60
Riot AI/HPC Equity Value Contribution¹⁰,¹¹,¹²
Riot has also begun to focus its hiring and labor expenditure on its data center strategy.¹³,¹⁴,¹⁵ Riot has also taken steps to improve its stock-based compensation, which is expected to decline significantly over the next two years.¹⁶
By eliminating distractions and streamlining expenses, Riot is now prepared to focus on executing its AI/HPC strategy. However, to fully benefit from this strategic transformation, Riot must complete its governance and operational transformation. Real estate companies, especially data center REITs, are largely valued based on the quality of their assets. But REIT investors also expect perfect governance, lean overhead, and a single business focus. As Riot executes large-scale value-add AI/HPC transactions, it must ensure it completes the transition to a first-class data center landlord.
The Time Has Come
The report believes Riot is transforming from a Bitcoin miner into a first-class AI/HPC data center company. Given that the company has been on this journey for over a year, and peers are executing in a dynamic and opportunity-rich environment, time is of the essence. The report believes the company is well-positioned to execute in the near term; however, if execution becomes more difficult, the report also believes Riot could be an exciting candidate for consolidation, and the report expects significant interest in the company and its high-quality power assets.
The report has enjoyed continuous and constructive communication with the company and looks forward to continuing to work with it to create significant value for the company and its shareholders.
Sincerely,
Peter A. Feld
Managing Member
Starboard Value LP