Fermi America ($FRMI) IPO: Building AI Data Centers with Its Own Power Plants

Fermi America ($FRMI) IPO: Building AI Data Centers with Its Own Power Plants

Fermi America – a startup co-founded by former U.S. Energy Secretary Rick Perry – has filed for an initial public offering (IPO) to fund an ambitious plan: creating one of the world’s largest data center campuses, complete with its own dedicated power grid. The Amarillo, Texas-based company is structured as a real estate investment trust (REIT) and aims to raise around $500 million in its IPO by offering 25 million shares at $18–$22 each. That pricing would value Fermi at roughly $12 billion (up to ~$13.2 billion at the high end). Below, we break down Fermi America’s business model, financials, growth prospects, and key highlights from its IPO filing – in plain English for retail investors.

Business Model: Data Centers + On-Site Energy Infrastructure

Fermi America’s core concept is to build a hyperscale data center campus (Project Matador, nicknamed the “HyperGrid”) that generates its own electricity on-site. In simple terms, Fermi will lease out data center space to customers (like artificial intelligence labs, cloud providers, and other computing-heavy businesses) and provide those tenants with power directly from dedicated facilities rather than relying solely on the public electric grid. The company’s site – on 5,200+ acres of land leased from Texas Tech University – is envisioned to host giant server warehouses (for cloud computing and AI workloads) alongside power plants fueled by a mix of natural gas, nuclear reactors, and solar energy. This vertically integrated model means Fermi plans to make money through long-term rental contracts for data center capacity and potentially through energy supply agreements, all on the same campus.

Key revenue streams (future): Once operational, Fermi’s income would come from:

• Data center leasing: renting space, racks, or entire buildings to companies that need large-scale computing infrastructure (targeting AI model developers, cloud providers, semiconductor firms, etc.). These leases would be similar to those of traditional data center REITs, providing steady rental income.
• On-site power services: selling electricity (and possibly cooling or other utilities) directly to tenants from Fermi’s private power grid. The campus is designed to be “grid-independent,” offering clients reliable power with multiple redundancies (hence Fermi’s term HyperRedundant™ power). In essence, tenants pay Fermi for a package of space and power, ensuring their supercomputers stay running 24/7 even if the local utility grid goes down. Notably, Fermi has no operating revenue yet – it’s still in the development stage. The company is essentially pre-building this enormous energy-and-data complex and will need to sign up major tenants to start generating revenue. According to its IPO prospectus, Fermi does not expect any revenue for at least the next 12 months as construction is just beginning.

IPO Details and Financial Snapshot

Fermi plans to list its shares on both the Nasdaq and the London Stock Exchange under the ticker FRMI, with UBS, Evercore ISI, Cantor Fitzgerald and Mizuho underwriting the offering. The company will offer 25 million shares priced between $18 and $22, aiming to raise about $500 million at the midpoint, which implies a valuation of roughly $12 billion—rising to about $13.2 billion at the top of the range.

So far in 2025 the company has reported no revenue and a cumulative net loss of $6.4 million since its January inception, reflecting modest startup costs. It has already secured about $350 million in pre-IPO financing, including a $100 million equity investment led by Macquarie Group and a $250 million credit facility earmarked for power-plant equipment.

Proceeds from the IPO will fund campus construction, such as gas turbines, nuclear equipment and “powered shells” for the first data-center buildings. Fermi targets 1.1 gigawatts of power and roughly 1 million square feet of data-center space by the end of 2026, with a long-term goal of 11 GW and about 18 million square feet by 2038. As a REIT, Fermi intends to distribute most future income as dividends for tax advantages, but investors should not expect payouts until the campus is built and generating revenue.

Growth Drivers and Market Opportunity

Fermi America is positioning itself at the crossroads of two fast-growing trends: soaring demand for AI computing and the need for massive, reliable power. Generative AI models and cloud services require enormous data-center capacity and huge amounts of electricity. Management calls AI “arguably the investment story of a lifetime,” noting that power has become a “key currency” for AI innovation. By combining gigawatts of on-site generation with dedicated server space, Fermi aims to give AI startups, chipmakers and cloud providers a one-stop solution as they hit power and space limits elsewhere.

• Unprecedented Scale: If built as planned, the HyperGrid campus would be the world’s largest data-center complex by both size and power—18 million square feet of facilities and 11 GW of capacity, enough to power Manhattan. Even its first phase—1.1 GW by 2026—would roughly double the output of today’s typical large campuses.
• AI and Cloud Demand Boom: Forecasts for AI infrastructure spending continue to surge: Oracle, for example, sees cloud revenue jumping from $18 billion to $144 billion in four years. Startups like OpenAI and Anthropic are raising tens of billions to build AI models, all of which require vast computing power. Fermi is positioning itself as the “pick-and-shovel” provider of the physical infrastructure—power plus real estate—to meet that need.
• Integrated Power Model: Unlike most operators that depend on the public grid and backup generators, Fermi plans to generate its own electricity using natural gas plants, solar and eventually nuclear reactors. Its “HyperRedundant™” design promises multiple layers of on-demand power, appealing to AI firms that cannot risk downtime.
• Government and Strategic Support: Fermi holds a 99-year land lease from Texas Tech University and plans academic collaboration and workforce training. It is working with Westinghouse Electric and Hyundai Engineering & Construction on advanced nuclear reactors and has applied for U.S. Department of Energy loan guarantees to help finance its power infrastructure.

Leadership and Key Backers

Fermi America highlights a leadership team with deep energy expertise and influential connections.

Rick Perry – Co-founder & Board Director
Former Texas governor and U.S. Energy Secretary, Perry brings political clout and long experience in the energy sector. His involvement signals the ability to navigate regulation and potential government funding. He has publicly framed the project as vital to U.S. competitiveness in both energy and AI, saying in June, “No one does energy better than Texas.”

Toby Neugebauer – Co-founder & CEO
An energy-industry veteran and co-founder of private-equity firm Quantum Energy Partners, Neugebauer offers financing know-how and industry relationships. Under his leadership Fermi has already secured $350 million in private funding, including a Macquarie-led round, and is building partnerships with major players. His background points to strong capital-markets expertise and the ability to structure large infrastructure deals.

Griffin Perry – Co-founder
Rick Perry’s son, Griffin helped form the company and has been key in building ties with Texas Tech and state initiatives—reinforcing the project’s Texas roots.

Other senior team members
Founders Larry Kellerman and Mesut Uzman add decades of power-project development, finance and engineering experience. Collectively, the leadership claims “over a century” of large-scale energy and infrastructure expertise.

Institutional and strategic support
Macquarie Group led the pre-IPO financing and Fermi’s filing points to discussions with U.S. Department of Energy loan programs and potential strategic partners such as Westinghouse and Hyundai for its nuclear build-out. Additional institutional investors are expected to participate after the IPO, drawn by the project’s scale and its AI-driven demand for power.

This article is for informational purposes only and is neither investment advice nor a solicitation to buy or sell securities. All investments involve inherent risks, including the total loss of principal, and past performance is not a guarantee of future results. Investing in initial public offerings (IPOs) carries additional risks, such as volatility, limited operating history, lack of liquidity, and potential overvaluation. IPO stocks may experience significant price fluctuations and may not perform as expected. Always conduct thorough research or consult with a financial expert before making any investment decisions. BBAE has no position in any investment mentioned.