Mining operators Hut 8 and Riot Platforms accelerated conversion of Bitcoin mining rigs to AI inference workload hosting.

Both Hut 8 and Riot Platforms are pivoting from pure Bitcoin mining toward high-density artificial intelligence and data center operations. As the race for computing power intensifies, the question for investors is which company is better positioned to capture the next wave of compute demand in 2026.

**Hut 8's Infrastructure Play**

Hut 8 operates as a diversified compute infrastructure provider with assets across North America. The company develops and manages power and digital infrastructure, including data centers and cloud services. Its Hut 8 Canada unit provides colocation services to more than 200 enterprise customers, reflecting a shift toward energy-intensive compute workloads.

The centerpiece of Hut 8's strategy is a 15-year lease for its River Bend campus AI data center, valued at approximately $7 billion, which serves as a primary revenue source. In FY 2025, the company reported revenue of nearly $235.1 million, a 45% increase from the prior year. However, it posted a net loss of approximately $226.1 million for the same period, a swing from net income of more than $338 million in 2024. As of December 2025, the company maintained a debt-to-equity ratio of nearly 0.3x, indicating relatively conservative use of borrowed funds. Free cash flow for the prior 12 months was negative $132.6 million.

**Riot Platforms' Vertically Integrated Approach**

Riot Platforms operates large-scale data centers with vertical integration across mining, engineering, and fabrication. The company's primary facilities are located in central Texas and Kentucky, serving major power markets. A key differentiator is its strategic shift toward high-performance computing, evidenced by a 10-year data center lease with Advanced Micro Devices at its Rockdale facility.

Riot is also exploring advanced energy solutions through a collaboration with Terrestrial Energy to study molten salt nuclear reactors for future data centers. In FY 2025, Riot Platforms reported revenue of nearly $647.4 million, reflecting revenue growth of nearly 72%. Despite this sales growth, the company reported a net loss of roughly $663.2 million for the fiscal year, a swing from $109 million net income in 2024. According to its December 2025 balance sheet, the debt-to-equity ratio is approximately 0.3x. Free cash flow for the period reached negative $774.3 million as the company continued to invest heavily in data center infrastructure and expansion projects.

**Risk Factors**

Hut 8 faces significant risks from Bitcoin price volatility, which directly affects financial results given its large holdings. The business is heavily dependent on reliable electrical power, particularly at sites in Texas and Louisiana, where grid constraints can force operational shutdowns. The company also faces intense competition for access to the power and land required for high-density AI workloads. A legal risk related to a 2023 merger was resolved through a settlement of roughly $2.35 million in mid-2026.

Riot Platforms is defending an intellectual property lawsuit over its data center cooling technology, brought by Green Revolution Cooling Inc. Like its peers, the company is highly sensitive to the power market, specifically to regulatory orders from the Electricity Reliability Committee of Texas (ERCOT) that could curtail operations in that state. Profitability remains concentrated in Bitcoin mining, making it vulnerable to price drops or increased mining difficulty. There is also the execution risk of pivoting to large-scale AI data centers; any failure to manage the technical transition could hurt financial performance relative to competitors like Marathon Digital Holdings.

**The Transformation Story**

Two years ago, Hut 8 began transforming its business from a Bitcoin miner to an energy- and AI data center-focused company. Management spun out its Bitcoin holdings subsidiary as a separately traded entity, American Bitcoin (NASDAQ:ABTC), which Hut 8 still controls. The move was designed to simplify the investment narrative around Hut 8's transformation into a data center and energy production developer. Its model centers on developing new data centers with on-site energy production and securing revenue from long-term leases. However, Hut 8's financials are still affected by American Bitcoin's operations, which are included in its accounting. The drop in Bitcoin's price in 2025, which is marked to market for the period, accounts for much of the net loss.

Similarly, Riot Platforms is transitioning to a data center operator while remaining heavily invested in Bitcoin. The company continues to mine for Bitcoin and uses the digital currency as an asset to help finance its data center developments. Its first major deal with AMD is a prototype of what it expects to do with other companies: develop a data center with co-located energy resources. Like Hut 8, Riot's books are affected by Bitcoin prices, with the marking to market of its Bitcoin holdings responsible for much of its fiscal 2025 net loss.

Both businesses are diversifying away from the boom-and-bust, increasingly expensive world of Bitcoin mining. Hut 8 controls about $675 million in Bitcoin while Riot controls more than $900 million, at recent prices. Both remain highly dependent on currency prices. On the positive side, these assets can be used to secure financing for capital-intensive data center development and backstop company valuations. The price-to-book value of Riot is 3.5x while Hut 8's is 7.9x. Book value is a rough estimate of what each business would be worth if liquidated.

**Analyst Outlook and Valuation**

Riot Platforms currently trades at significantly lower earnings and sales multiples than Hut 8, suggesting a more conservative valuation relative to future earnings estimates. Wall Street analysts see Hut 8 growing revenue faster than Riot, with consensus revenue near $1.4 billion in 2030. For Riot, analysts project revenue will jump to $1.9 billion in 2029. However, both estimates are highly speculative and depend on businesses executing their AI and energy plans well.

Right now, Riot Platforms, with its cheaper price-to-sales and price-to-book multiples, is the choice to make in 2026.

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Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices.