Rick Perry's Fermi Loses $150M In Construction Funding From Prospective Tenant
A potential tenant in Fermi America’s flagship project has pulled out of a deal to help fund the construction of the data center and power production megacampus.
The unnamed company, described as Fermi’s “First Tenant” in a regulatory filing, ended an advance-in-aid-of-construction agreement that would have provided up to $150M to help build the 11-gigawatt data center development in Carson County, Texas. The tenant is still pursuing a potential lease at the project, Fermi disclosed in a filing with the Securities and Exchange Commission on Friday.
The filing spurred a stock sell-off that pushed Fermi’s shares down more than 30% in early Friday trading.
The firm, co-founded by former Texas Gov. and U.S. Secretary of Energy Rick Perry and Toby Neugebauer of Quantum Energy Partners, went public in early October and raised $682M in its first day of trading as shares surged.
But the stock has been on a downward slide since, in part because investors are growing warier of artificial intelligence investments, but also because the REIT has struggled to find a tenant or financing for its first project. The stock is down more than 60% from its first public trading day.
Fermi didn’t respond to Bisnow’s request for comment Friday morning. The company said in Friday’s SEC filing that it expects to stay on schedule and deliver power to the site next year.
Fermi is ultimately aiming to build a private energy grid to power Project Matador, deploying natural gas, solar and nuclear power solutions to reach its 11 GW target.
A filing with the Nuclear Regulatory Commission indicates that the development would be named the President Donald J. Trump Advanced Energy and Intelligence Campus.
Xcel Energy, a publicly traded energy company based in Minnesota, signed a deal this month to provide 200 MW of power to the campus, starting with 86 MW in January and ramping up to the full capacity.
Fermi said last month that it was negotiating $4B in nonrecourse project financing to build the campus. That type of debt only allows the lender to recover losses from that specific project and not Fermi’s broader assets.
Project Matador site work began in January, and Fermi said in third-quarter results released last month that it expected to begin vertical construction by the end of this year if it is able to execute a definitive lease agreement with a tenant. The first gigawatt of capacity is expected to deliver by the end of 2026.
Fermi hasn’t announced any tenants, and it hasn’t reached a deal with the company in Friday’s SEC filing.
The multiphase Project Matador would start with solar and natural gas before adding a single nuclear reactor as part of the project's third phase. The fourth and final phase would add up to four additional nuclear reactors and has a target delivery date at the end of 2038.
Power procurement has been a key hurdle in the AI-driven data center construction boom, and tech giants and developers are turning to on-site power generation to make sure their servers can stay online.
But talk of an AI bubble is getting louder, and the underperformance of key AI stocks like Nvidia in recent weeks signals that investors of all sizes are spending less freely on the sector.
