Fermi signs first lease, names new CEO as stock jumps 23%

Fermi signed AI cloud provider TensorWave for a 222-megawatt lease at its Texas campus, projected to generate $6.5 billion over 15 years, and named Lee McIntire as chief executive.

"Fermi's next chapter is a construction and power delivery story, and we believe Lee is the ideal executive to lead Fermi through that process," Marius Haas, chairman of Fermi's board, said in a statement. "The job now is to build on schedule, on budget, and safely."

The lease covers 222 megawatts at Project Matador, a site on former grazing land owned by the Texas Tech University System that spans more than half the size of Manhattan. The company projects the campus could reach 4.8 gigawatts of capacity within about 30 months, eventually scaling to 17 gigawatts — more power generation than some states require. Hillcore Energy Capital will build, own and operate 2.6 gigawatts of generation, mostly natural gas with some solar and battery storage, at the site, with Fermi holding an option to buy the plant in a decade.

Fermi reported a net loss of $25.8 million for the second quarter with no revenue booked. The company's market value has fallen from roughly $19 billion at its October IPO to under $5 billion. The stock jumped nearly 23 percent since Monday's lease announcement before giving up much of those gains Thursday, closing down 13.16 percent.

Project Matador Takes Shape

McIntire, who previously served as chief executive at engineering firm CH2M Hill and TerraPower, the nuclear startup founded by Bill Gates, brings four decades of large-scale infrastructure delivery experience. He had been an independent member of Fermi's board, giving him insider knowledge of the company's trajectory through its recent growth phase.

The appointment came more than three months after Fermi ousted co-founder Toby Neugebauer as CEO in April, a move that triggered legal fights and a call by the executive — who is also a major shareholder — for changes that included possibly selling the company. Fermi opposed the sale idea. CFO Miles Everson also departed at the time, with the company describing the shakeup and plans for a Dallas headquarters as "Fermi 2.0."

"My wife, Melissa, and I have not sold a single Fermi share since the IPO," Neugebauer said in a statement Thursday. "Given the last 100 days' performance, we continue to believe that Fermi is grossly undervalued and reiterate our call for a strategic, full-value dual process and governance review."

The governance dispute remains unresolved, and Neugebauer's continued push for a strategic review adds uncertainty to Fermi's execution timeline. The company's response has been to focus on operational milestones — the TensorWave lease and the leadership transition — as evidence that its business model is gaining traction.

BYOP: The Race to Power AI Data Centers

Fermi's strategy centers on "Bring Your Own Power," or BYOP, a growing trend as AI workloads consume unprecedented amounts of electricity. Supply-chain backlogs, permitting fights and power availability have caused data center construction to fall behind timelines this year, creating openings for companies that can deliver on-site generation.

"The core question now is, 'How fast can you deliver power in 27?'" Haas said Thursday. Potential customers are running into roadblocks in other locations, he added. "So they're now all knocking on the door, coming and having the conversations with the team."

Fermi's approach differs from traditional data center operators that rely on grid power. By building dedicated on-site generation, the company aims to bypass interconnection queues and transmission constraints that have delayed projects across the United States. The strategy has attracted attention from AI cloud providers seeking guaranteed power for GPU-heavy workloads, which can draw as much electricity as a small town.

Mizuho Americas analysts described the TensorWave lease as a long-awaited milestone for the company. The deal gives Fermi a path to revenue in a market where hyperscalers and AI cloud providers are competing for power capacity to run GPU clusters. The company's ability to deliver 4.8 gigawatts within 30 months will determine whether it can capitalize on the power bottleneck facing the AI industry.

Fermi shares, trading under the ticker FRMI, remain well below their IPO price as the company works to convert its pipeline into binding agreements. The lease, combined with the leadership transition, gives the company its clearest path yet to revenue, though execution risk remains high given the scale of construction required. The company plans to build four large nuclear reactors at the site, a process that typically takes years and faces significant regulatory scrutiny.

This article is for informational purposes only and does not constitute investment advice.