Fermi Craters 50% After Losing First Tenant For Its Massive Texas Data Center

Fermi America announced their first potential tenant for the Project Matador data center campus terminated their $150 million Advance in Aid of Construction agreement (i.e., lease). The stock has plunged as much as 50% in premarket trading in what is a wild overreaction with unprecedented demand for data center space (especially data centers named after the president) still offset with limited supply.

Several weeks ago, we documented Fermi’s difficulties with signing their first major tenant last month for their President Donald J. Trump Advanced Energy and Intelligence campus in Texas, set to become the world’s largest mixed-use data center. Co-founded by former Texas Governor and Secretary of Energy Rick Perry, the company has yet to close a deal with a data center developer for their massive 11 GW campus outside of the Pentax facility.

What is bizarre, is that the company is on track to bring hundreds of megawatts on line for the site by the beginning of next year, has 6 GW of gas turbine power already permitted, and is currently progressing with the NRC to allow the construction of 4 AP1000 reactors. Yet somehow there isn’t a line of potential customers around the block desperate for rack space. At least not yet, although we expect that will change one Trump tweets about it. 

Fermi is marketing their campus towards hyperscalers, with some tenants likely to include the biggest tech players such as Palantir. One of the government’s leading AI providers, Palantir was noted as currently being in discussion with Fermi about taking up a spot at Project Matador with a site visit expected to occur in the near future.

Fermi’s Project Matador – The President Donald J. Trump Advanced Energy and Intelligence Campus.

The company notes that negotiations on the terms of the lease are continuing with their first potential mystery tenant that has cut off the $150 million for construction advances, and Fermi is continuing discussions with other potential tenants.

We have noted multiple times the extreme difficulties experienced by other data center developers throughout the United States, and abroad, with overcoming local opposition from NIMBY activists. Locals are still struggling to welcome the large data center developments to their towns due to concerns about increased energy consumption and prices, along with water usage.

With some of the data centers consuming as much as an entire city’s worth of water on their own, many activists have been able to petition regional leadership to block data center development on those grounds alone. Fermi has already demonstrated that they are well ahead of this with pre-permitting already completed for new power generation and millions of gallons of water per day already secured from nearby towns with access to massive aquifers.