Amazon has been identified as the major prospective tenant that withdrew its financial commitment from Fermi America’s ambitious multi-gigawatt data center initiative—an abrupt move that caused a dramatic collapse in the developer’s stock price earlier this month, according to information obtained by Business Insider.
To provide context, in September Fermi America announced that it had reached a preliminary, nonbinding letter of intent with a yet-unnamed, investment-grade tenant to serve as the cornerstone occupant of its extensive 11-gigawatt data center complex being developed in the Texas Panhandle. This potential tenant was expected to lease and utilize the first gigawatt of available power across a dozen individual facilities, effectively anchoring the entire project both financially and logistically.
However, on Friday, December 12, the market reacted sharply when Fermi’s stock lost nearly half of its value following the release of a securities filing. The filing disclosed that an unidentified partner had unexpectedly terminated a $150 million upfront payment intended to initiate the project’s construction. This payment, formally structured as an Advance in Aid of Construction Agreement (often abbreviated as AICA), was essential to moving the build-out into its earliest phase. The cancellation reportedly occurred immediately after the exclusive negotiating period between the two parties came to a close, raising concerns among investors about the project’s stability and future prospects.
Just three days later, on December 15, Fermi America’s billionaire founder and CEO, Toby Neugebauer, confirmed during a phone interview with Business Insider that the mystery tenant was in fact Amazon, one of the world’s largest and most influential technology corporations. Neugebauer explained that the Seattle-based company had been engaged in complex negotiations over a deal projected to exceed $20 billion in total payments distributed over the next twenty years—an enormous long-term commitment that underscored the transformative scale of the endeavor. According to Neugebauer, the principal negotiator representing Amazon contacted him directly the preceding Thursday to discuss the decision and the circumstances that prompted the temporary halt.
Despite the disruption, Neugebauer emphasized that discussions between Fermi America and Amazon remained productive, characterizing the ongoing exchanges as part of a normal and often protracted negotiation process typical of agreements of such magnitude and complexity. He clarified that the termination of the AICA was not symptomatic of a breakdown or deterioration in the relationship but simply a procedural decision tied to the conclusion of the exclusivity period. In his words, the core issue was Amazon’s reluctance to disburse additional funds once its exclusive negotiating rights had expired, a stance he regarded as understandable from a corporate governance standpoint.
When questioned about the potential delay this might introduce, Neugebauer expressed confidence and calm, noting that negotiations of this scale naturally evolve over extended timelines. “It’s a big deal,” he remarked, underscoring that such monumental arrangements inherently demand patience and meticulous attention to intricate details. Amazon’s spokesperson, Lisa Levandowski, declined to issue any comment on the matter, maintaining the company’s standard practice of refraining from public discussion of sensitive or ongoing negotiations.
Fermi America’s Panhandle initiative, known internally as Project Matador, represents one of the most ambitious and technically demanding ventures aimed at meeting the surging energy demands generated by data centers powering the rapidly expanding artificial intelligence sector. The project’s scope is unprecedented: Fermi plans to bring online an immense 11 gigawatts of power supply over the next decade or more, harnessing a diversified energy portfolio that will draw from conventional grid power, natural gas, and advanced nuclear energy sources, reflecting a balanced approach to sustainability, reliability, and capacity scalability.
The company, which entered public markets in September with an initial public offering priced at $21 per share to raise over $680 million, structured the development under a 99-year ground lease agreement with the Texas Tech University System. This long-term lease is contingent upon a binding letter of intent with a primary tenant—making Amazon’s participation not merely beneficial but central to the project’s viability. The December 12 filing also clarified that none of the $150 million previously allocated for the construction advance had been expended, reaffirming that negotiations remained active and the preliminary letter of intent continued to hold legal and operational force.
Financial analysts from Cantor Fitzgerald, in their research note published on the same day, reported that after direct discussions with Fermi America’s management, they learned the anchor tenant—now confirmed to be Amazon—had attempted to introduce late-stage pricing modifications that Fermi deemed untenable. These proposed revisions to the financial framework of the contract were, according to the analysts, the central reason behind the temporary pause in progress.
Amazon is not the first major enterprise linked to Fermi’s project. Earlier, in October, Neugebauer told the Amarillo City Council that Palantir Technologies, the data analytics firm known for its extensive government and defense partnerships, had demonstrated interest in the Texas development. At that time, Neugebauer lauded Palantir’s role within the national artificial intelligence ecosystem, referring to it as “our nation’s tip of the spear in the AI war,” and noted that company representatives were planning a visit to the site later that same week.
According to the December note by Cantor Fitzgerald, Fermi’s leadership also indicated that besides Amazon, they were in active discussions with two additional potential anchor tenants and in exploratory dialogue with up to four more interested parties, highlighting sustained commercial interest despite the temporary financial turbulence.
Founded less than a year ago by Toby Neugebauer, former U.S. Energy Secretary Rick Perry, and Perry’s son Griffin, Fermi America rapidly rose to prominence in the competitive energy-development sector. Valued at nearly $14 billion at the time of its IPO, the company has since witnessed a steep decline in its stock performance, bringing its market capitalization to under $6 billion following the recent fluctuations. Nevertheless, the continuation of high-level negotiations with Amazon and other potential partners suggests that the company’s strategic ambitions remain intact, even as it navigates the growing pains typical of a rapidly expanding enterprise in a volatile market.
Sourse: https://www.businessinsider.com/fermi-america-amazon-tenant-texas-data-centers-2025-12
