Trump-Linked Data Center REIT Fermi Faces Doubts About Its Future

Facing allegations of misconduct, fleeing tenants, project delays and a boardroom power struggle, a data center REIT touting the world’s largest artificial intelligence campus and its close ties to the Trump administration appears to be descending into chaos. 

Fermi America announced its launch in June and went public less than six months later, raising more than $682M in its initial public offering by pitching its vision for a massive nuclear-powered data center campus in Texas and the political connections of its leaders. 

With founders including former Energy Secretary Rick Perry and the son of a Republican congressman, the company wasn't shy about highlighting its connections to the Trump White House.

The firm’s planned 17-gigawatt campus in the Texas Panhandle — now known as Project Matador — was originally branded as the President Donald J. Trump Advanced Energy and Intelligence Campus. The company’s leadership also boasted to investors that administration officials had personally helped the firm procure turbines needed to power the site. 

At the time of its IPO in October, company officials said the first 1M SF of data centers would be operational by this month and the first gigawatt of capacity by the end of 2026. Yet those plans have unraveled over the past six months, with dysfunction surrounding the firm coming to a head in recent weeks. 

Last week, Fermi fired CEO and co-founder Toby Neugebauer and announced a strategic shift to “Fermi 2.0” amid stalled progress on Project Matador and a collapsing share price — down more than 75% since its IPO. The departure of other key leaders followed soon after. 

The leadership purge coincided with the publication of two scathing reports from energy analytics firm Cleanview and short seller Fuzzy Panda Research alleging misleading statements and illicit conduct by Fermi executives. They also cast doubt as to whether, even with its political connections, the firm will be able to bring its only project to fruition.

“A bet on a company that plans to build a massive AI data center and enough power generation to light up 2.5x New York Cities is a wager on truly excellent management and executive,” Fuzzy Panda said in its report. “These guys are like the Bad News Bears of insider enrichment.”

Signs of trouble emerged around Fermi shortly after the firm began selling its shares on the Nasdaq Stock Market. 

The company announced in November that it had secured an investment-grade anchor tenant, a critical step toward securing financing for a data center project. Neugebauer told Business Insider that the tenant, which would also provide $150M in development funding, was Amazon. 

But less than a month later, Fermi revealed on its quarterly earnings call that the tenant negotiations had stalled. By the end of the year, the tenant had formally withdrawn from the deal, triggering a 34% drop in Fermi’s share price.

The company still hasn’t secured a tenant for the site. 

Amazon’s withdrawal also prompted a class-action lawsuit against Fermi from investors claiming the firm overstated tenant interest in the site and the degree to which its future was dependent on a tenuous commitment from a single hyperscaler. 

Concerning headlines about the company continued to emerge in the weeks that followed. 

Energy writer Robert Bryce reported on Substack that a Fermi founder and several executives were selling off their stock in the firm. Then Politico revealed an argument at a conference between Neugebauer and Commerce Secretary Howard Lutnick, a clash that the publication said “hints at trouble” for Project Matador. Meanwhile, an Amarillo newspaper reported on potential layoffs of construction workers at the Project Matador site. 

Fermi is also struggling to procure equipment needed for construction to commence, a major problem for potential tenants focused on speed to market.

Not only did Fermi need Trump administration intervention to secure gas turbines, but the firm has also acknowledged it is running into problems acquiring cooling systems that need to be secured before a tenant signs on. 

“I think it's a bigger bottleneck than we originally anticipated,” Neugebauer said in March on the company’s most recent earnings call. 

Fermi may also be at risk of losing some of the equipment it has managed to secure.

On the same earnings call, the firm’s chief financial officer said the prized turbines procured with financial and political capital may have to be sold to “preserve liquidity” and meet obligations to lenders. Fermi has a Macquarie Equipment Finance term loan with a 49% effective interest rate, requiring an approximate $149M repayment in August, Atrium Data Research reports.

While the reports from Cleanview and Fuzzy Panda rehashed many of these same concerns, they also leveled new accusations of misleading statements and other improper conduct by Fermi executives. 

Cleanview took particular issue with claims made by Fermi about progress on the construction of Project Matador, commissioning satellite imagery to show that the firm’s leadership routinely significantly overstated how far work on the site had progressed.

The report highlights the firm's statement in February that the first phase of construction was almost complete. Satellite imagery shows a site that is far from operational, with almost no progress made in the time since. 

Anonymous short seller Fuzzy Panda also emphasized evidence of Fermi's stalled construction, contradicting its pronouncements about Project Matador's progress. Although the report accuses Fermi executives of insider dealing and promotes claims of past financial malfeasance by the company’s leadership, its case against Fermi ultimately rests on the argument that its leaders are unqualified to execute a digital infrastructure project of unprecedented scale and complexity.

“Fermi is not a field of AI dreams … it’s a field of dirt,” the short seller wrote.  “Sure, if they built it, a tenant would come. But they lack the capital needed to build it, the expertise to build it — and now they’ve had to even stop building it. Fermi has a Catch-22 that no AI hyperscaler wants to be stuck in.”

Fermi stock dropped an additional 21% last week following Fuzzy Panda’s report. By week’s end, the company had ousted Neugebauer, framing the move as part of a strategic plan to move at “FermiSpeed” toward its nuclear build-out.

Fermi shares dropped an additional 31% in postmarket trading following Neugebauer’s move, and less than 48 hours later, Chief Financial Officer Miles Everson departed.

The leadership change has done little to calm the drama and perception of dysfunction surrounding the company. 

On Monday, Neugebauer — who is also Fermi’s largest shareholder — released a statement touting the progress of Project Matador and calling for the company to be sold.

Fermi on Tuesday issued its own statement dismissing calls for a sale and touting its new strategic plan.

“Given recent changes in leadership, which position the Company for its next chapter of growth and evolution from a startup to a scaled enterprise, the Company firmly believes a sale is not in the best interest of its continued momentum on Project Matador, ability to serve potential tenants and long-term value creation for shareholders,” Fermi said. 

Fermi didn’t respond to Bisnow’s request for additional comment.