AI Campus Developer Fermi Plunges After Tenant Terminates Lease
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Article content(Bloomberg) — Fermi Inc. plunged as much as 46% on Friday after the power developer, co-founded by former Texas governor Rick Perry, said a tenant terminated a $150 million agreement tied to its proposed artificial intelligence campus in West Texas.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe company said its first investment-grade tenant canceled a deal from Nov. 4 that would have provided as much as $150 million to fund construction costs, according to a filing Friday. No funds had been drawn under that agreement. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentFermi’s disclosure adds to worries of a potential bubble in the AI-power boom. Such concerns have dragged in recent weeks on the shares of several companies that promised to power data centers. The company, which doesn’t yet generate revenues, was valued at $19 billion in October and has lost more than two-thirds of its value in two months.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentFermi had mostly enjoyed a sharp rise from its inception earlier this year thanks to its lofty ambition to build the world’s biggest private grid for a data-center campus. Reaching its goal would use more than twice the power of New York City.Article content“This was kind of the darling that came out in the hype of the AI power market and right after the IPO there were a couple of cracks that started to appear: Are we actually overbuilding these things and how are these things being financed? The hype needs to shift into actual tangible results,” said Timm Schneider, an energy analyst and founder of The Schneider Capital Group.Article contentFermi did not immediately respond to a requests for comment.Article contentThere’s growing investor uncertainty about whether developers can secure firm, long-term demand for massive new power projects aimed at serving AI data centers, and whether West Texas will emerge as a major hub for the energy-intensive buildout. Companies across the sector are racing to add generation, but markets are increasingly focused on which projects can translate early interest into binding contracts. Article contentArticle contentThe parties continue to negotiate the terms of a lease agreement tied to a letter of intent signed in September. That agreement included an exclusivity provision that expired Dec. 9. Since then, Fermi has begun discussions with several other potential electricity customers and remains on track to begin power delivery in 2026.Article contentFermi plans to build four large nuclear reactors and has likened the race to power AI to the Manhattan Project from World War II to build atomic bombs. The company is facing intensifying competition from long-standing power developers to private equity giants, all aiming to win over the same technology giants.Article content(Updates shares, adds details.)Article contentTrending CRA penalized taxpayer for repeated failure to report income Personal Finance Posthaste: Canadian investors love the Big Six banks more than is good for them, this adviser says News Who is Mark Wiseman? The career of the man expected to be Canada’s new U.S. ambassador Finance Canadian households boost their wealth to another record high of $18.4 trillion with ‘supercharged' financial asset growth Wealth Canadian economy could face a rocky start to 2026 News Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. CRA penalized taxpayer for repeated failure to report income Personal Finance Posthaste: Canadian investors love the Big Six banks more than is good for them, this adviser says News Who is Mark Wiseman? The career of the man expected to be Canada’s new U.S. ambassador Finance Canadian households boost their wealth to another record high of $18.4 trillion with ‘supercharged' financial asset growth Wealth Canadian economy could face a rocky start to 2026 News