Fermi's Stock Plummets After Key Tenant Exits $150 Million Texas Data Center Deal December 15, 2025 Shares of Fermi, a high-profile data center developer, experienced a dramatic sell-off following the collapse of a major pre-lease agreement for its ambitious Texas campus, highlighting the market's sensitivity to execution risks in capital-intensive infrastructure projects. The company announced on Friday that an unnamed, investment-grade tenant had terminated a non-binding letter of intent (LOI) to be the anchor customer for its planned 11-gigawatt "Project Matador" campus near Amarillo. The LOI, signed in September, had outlined an initial commitment worth $150 million to support the project's development. Fermi's share price fell as much as 46 percent on the news, though it recovered some ground by Monday morning. The deal's failure, according to industry analysts, stemmed from a pricing dispute. Derek Soderberg, a clean energy research analyst at Cantor Fitzgerald, told the Financial Times that Fermi's management demonstrated "pricing discipline," unwilling to set a negative precedent for future power sales at the massive site. Despite the setback, Fermi stated it has commenced discussions with several other potential tenants for power delivery starting in 2026 and remains confident in its schedule, citing robust near and long-term demand for behind-the-meter power to fuel artificial intelligence workloads. The incident casts a spotlight on Fermi's ambitious yet unproven business model. Co-founded by former Texas Governor Rick Perry, the company went public in October, raising $682 million at a valuation of nearly $15 billion despite having no operational data centers. Its flagship Project Matador, planned on land owned by the Texas Tech University system, envisions an 18-million-square-foot campus powered by a mix of natural gas, solar, wind, and nuclear energy. The first two phases alone, targeting 1.1GW of capacity, are estimated to cost $2 billion. The loss of a foundational tenant for a project of this scale underscores the challenges new entrants face in securing firm commitments in a competitive market. It also serves as a cautionary tale for investors betting on pre-revenue companies in the booming but execution-heavy data center sector. While Fermi maintains its bullish outlook, the market's severe reaction reflects deep-seated concerns over the company's ability to convert its grand vision into contracted revenue. Source: datacenterdynamics
Fermi's Stock Plummets After Key Tenant Exits $150 Million Texas Data Center Deal
