Turmoil at the Texas data center company Fermi is a cautionary tale about what happens when a startup jumps too quickly into the AI development boom. Fermi was an early mover in the \u201cpowered land\u201d business model, with a plan to lease space to tech companies on an enormous tract it was equipping with 17 gigawatts of sparkling new gas turbines and nuclear reactors. It had some big advantages, especially political backing from the Trump administration \u2014 the president\u2019s former Energy Secretary Rick Perry is a cofounder \u2014 that allowed it to secure rare gas turbines from Siemens.<\/p>\n
But six months after a high-profile IPO, the company\u2019s share price has crashed, and its CEO and CFO both left their posts this weekend, reportedly over disagreements about whether to sell the firm<\/a> (Fermi didn\u2019t respond to a request for comment). The biggest problem \u2014 among others documented in a good feature this week<\/a> by cleantech researcher Michael Thomas \u2014 was the company\u2019s decision to go public before securing a primary tenant. Other startups pursuing similar projects are now moving much more cautiously, one Wall Street financier tracking the sector told me.<\/p>\n \u201cThe project was marketed as AI-ready infrastructure before it\u2019d secured anchor offtake, tenant-driven cooling, financing certainty, and credible delivery sequencing,\u201d said Paresh Patel, founder of Equitable Energy Ventures, a Houston-based clean tech startup investor and adviser. \u201cThis was less an AI-demand bust than a bankability collapse inside an over-marketed megaproject that went public before the core pieces were truly locked. The real story isn\u2019t that AI demand is fake or overstated. It\u2019s that [in this case] the market got ahead of what was actually financeable and executable.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Turmoil at the Texas data center company Fermi is a cautionary tale about what happens when a startup…\n","protected":false},"author":2,"featured_media":264169,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[27,29,28],"class_list":{"0":"post-264168","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-texas","8":"tag-texas","9":"tag-texas-headlines","10":"tag-texas-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/264168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=264168"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/264168\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/264169"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=264168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=264168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=264168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}