Shares of Riot Platforms (RIOT) experienced a significant 8% increase on Friday, driven by the announcement that Advanced Micro Devices (AMD) would be expanding its capacity at Riot's Rockdale, Texas campus. This development highlights Riot's ongoing pivot from bitcoin mining to artificial intelligence and high-performance computing. According to the company's Q1 financial results, AMD has opted to double its contracted capacity to 50 megawatts (MW), with the potential for further expansion to 150MW.

The agreement is expected to generate approximately $636 million over a 10-year period. Additionally, Riot has secured more favorable terms for its $200 million bitcoin-backed credit facility with Coinbase, reducing the interest rate to a fixed 6.15% from 8.3% and releasing 1,544 pledged collateral bitcoin. This move signals growing lender confidence in the company's expanding data center business.

The combination of the AMD deal and improved credit terms has led investors to pay a premium for the stock. 'The market is factoring in a lower cost of capital as the expanded AMD deal drives lender confidence,' stated Matthew Sigel, head of digital assets research at VanEck. Riot was one of the last remaining 'pure play' mining companies that had not yet ventured into hosting AI computing, while its peers had begun to open their data centers to move away from mining.

However, with activist investor Starboard urging the management to accelerate its transition from bitcoin mining to an AI infrastructure provider, the company's decision to expand its data center business to host AI computers appears to be paying off. The Castle Rock, Colorado-based company reported total revenue of $167.2 million for the quarter ended March 31, up from $161.4 million in the previous year, supported by $33.2 million in initial data center revenue. Although bitcoin mining revenue decreased to $111.9 million from $142.9 million due to lower bitcoin prices and increased mining competition, the company's shares have risen by approximately 147% over the last 12 months, while bitcoin has fallen nearly 17%. Riot, which previously retained all its mined bitcoin, is also accelerating its bitcoin sales.

According to Bitcoin Treasuries data, the company sold 3,688 BTC during Q1, ending March with 15,679 BTC and $282.5 million in cash.