Data center startup Fermi promised nuclear power for AI. But it couldn’t sign a single client

Fermi Inc., a data center startup that had promised 17 gigawatts of dedicated power for AI operations in the Texas panhandle, has faced significant challenges, including the dismissal of its CEO, Toby Neugebauer, and an inability to sign any clients. Co-founded by Neugebauer and former Texas Governor Rick Perry, the company went public with a valuation exceeding $19 billion based on its concept of developing power plants, initially natural gas and later nuclear, directly adjacent to hyperscale data centers near Amarillo. Despite its high-profile founders and an appealing pitch combining AI, nuclear energy, and political connections, Fermi reported no revenue or signed customers. The company's board terminated Neugebauer for alleged violations of his employment agreement and internal policies. Neugebauer, who remains Fermi's largest shareholder, has disputed his removal as unjust and filed a lawsuit against Fermi and three of its directors for wrongful termination. He has also advocated for an immediate sale of the company. Fermi's stock has plummeted 84% from its peak, and its over 5,000-acre Project Matador site remains largely undeveloped. A $150-million agreement with a potential tenant fell through, later identified by sources as Amazon, reportedly due to disagreements over contract duration and the project's estimated power reliability. Energy analysts, including Timm Schneider, see Fermi's struggles as a cautionary example of AI market exuberance outstripping the reality of project execution, particularly for off-grid power solutions that financial institutions are reluctant to back. The Texas Tech University System, which leased the land to Fermi, has expressed continued support for the project despite the company's leadership changes, while Fermi's board has formed an interim "Office of the CEO" and asserted that a sale would not serve the company's best long-term interests.