<\/p>\n
Fermi America and the Texas Tech University System announced in June that it is building a first-of-its-kind behind-the-wall HyperGrid in Amarillo. The project, shown in this rendering, is expected to be the world’s largest energy-driven AI complex. Texas billionaire Toby Neugebauer, who co-founded the company with former Gov. Rick Perry, has been trying to capitalize on two hype cycles that have spurred ridiculous valuations: artificial intelligence and small nuclear reactors. But critics question whether Fermi may be all hat and no cattle.<\/p>\n
Fermi America\/Dallas Morning News<\/p>\n
Rick Perry addresses a crowd on Thursday, Feb. 15, 2024. Texas billionaire Toby Neugebauer, who co-founded Fermi America with former Gov. Rick Perry, has been trying to capitalize on two hype cycles that have spurred ridiculous valuations: artificial intelligence and small nuclear reactors. But critics question whether Fermi may be all hat and no cattle.<\/p>\n
Kim Brent\/Beaumont Enterprise<\/p>\n
Then-Secretary of Energy Rick Perry speaks during the luncheon at CERAWeek by S&P Global. Texas billionaire Toby Neugebauer, who co-founded Fermi America with Perry, has been trying to capitalize on two hype cycles that have spurred ridiculous valuations: artificial intelligence and small nuclear reactors. But critics question whether Fermi may be all hat and no cattle.<\/p>\n
Michael Wyke\/Contributor<\/p>\n
Texas billionaire Toby Neugebauer, who co-founded Fermi America with former Gov. Rick Perry, has been trying to capitalize on two hype cycles that have spurred ridiculous valuations: artificial intelligence and small nuclear reactors. But critics question whether Fermi may be all hat and no cattle.<\/p>\n
HANDOUT<\/p>\n
Texas billionaire Toby Neugebauer<\/a> is having a stretch of bad luck, and so is anyone who has invested in his companies.<\/p>\n When he was CEO of Fermi America, a startup promising to build a nuclear-powered mega-datacenter near Amarillo, Neugebauer said he \u201cwould auction off my two boys\u201d<\/a> before selling the company\u2019s natural gas generators, a scarce commodity these days.<\/p>\n A few weeks later, after the board of directors fired him<\/a>, Neugebauer called on \u201cthe Fermi board<\/a> to conduct an immediate process, led by an independent investment bank, for the sale of the company.\u201d<\/p>\n Article continues below this ad<\/p>\n MAP: See where data centers are located near you<\/a><\/p>\n Fermi is Neugebauer’s second startup where investors rebelled as the company crashed. As Fermi\u2019s largest shareholder, Neugebauer is trying to cash out after its stock price fell 81% since it was listed in October on the NASDAQ and valued at $12.5 billion. Critics say Neugebauer is\u00a0at best a bad manager<\/a> and accuse him of misleading investors<\/a>.<\/p>\n Neugebauer and Fermi executives did not respond through multiple avenues to multiple requests for comment. But in a press release, Neugebauer expressed his belief that “Fermi is creating the most efficient and effective solution for the AI energy crisis” and “continues to be aligned with what is in the best interest of all shareholders.”<\/p>\n The company, co-founded with former Gov. Rick Perry, has been trying to capitalize on two hype cycles that have spurred ridiculous valuations: artificial intelligence and small nuclear reactors. But critics question whether Fermi is all hat and no cattle with no customers, no revenue and a rapidly depleting bank account.<\/p>\n Article continues below this ad<\/p>\n Poor past performance<\/p>\n Neugebauer\u2019s previous business catastrophe, a company called GloriFi, also tried to ride two investment waves in financial technology, known as fintech<\/a>, and \u201canti-woke\u201d investing. He attracted some of the nation\u2019s most conservative investors, but they would soon accuse him of squandering\u00a0millions of dollars, triggering\u00a0lawsuits full of shocking allegations.<\/p>\n Before starting GloriFi, Neugebauer made $1.1 billion as an investor, starting with investment banker Kidder, Peabody & Co., before co-founding private equity firms Windrock Energy and Quantum Energy Partners. He used those profits to buy a share of Major League Soccer team Austin FC and invest in well-connected politicians.<\/p>\n GOP politics runs in the family. His father, Randy Neugebauer, represented Lubbock in the U.S. House of Representatives. Toby\u00a0Neugebauer gave Perry $110,000 while he was governor and donated $136,000 toward<\/a> his 2011 presidential bid. Until 2024, he lived in a $40 million\u00a0near-replica of the White House<\/a> in Dallas\u2019s Preston Hollow neighborhood. (The 17,679 square foot, six-bedroom mansion does not include an Oval Office<\/a>.)<\/p>\n Neugebauer, in 2021, started work on GloriFi, an “anti-woke” bank backed by fellow right-wing billionaires Peter Thiel, Joe Lonsdale, Vivek Ramaswamy and Ken Griffin. As CEO, Neugebauer pitched the firm to conservatives who viewed Wall Street as too liberal.<\/p>\n Article continues below this ad<\/p>\n However, the company imploded within days of its launch. In a 2023 lawsuit, Neugebauer accused the investors<\/a> named above of sabotaging the bank by denying it funding as part of a scheme to take it over.<\/p>\n The investors were upset with Neugebauer and pulled their funds when they couldn’t oust him. GloriFi board member Nick Ayers, who served as former Vice President Mike Pence\u2019s chief of staff, alleged Neugebauer was volatile, drinking on the job and mismanaging the company,\u00a0the Wall Street Journal reported<\/a>. The company remains in bankruptcy court, where a trustee accused the former CEO of fraudulent transfers of assets<\/a>, court documents show.<\/p>\n POLITICAL IMPACTS: Data center opponents put Ken Paxton in bind ahead of Senate runoff<\/a><\/p>\n A year later, Neugebauer got his GloriFi band back together to start Fermi. He included GloriFi board member Charlie Hamilton as\u00a0Fermi\u2019s chief site officer, GloriFi chief financial officer Miles Everson became Fermi\u2019s CFO, GloriFi\u2019s chief marketing officer Cathy Landtroop filled the same role at Fermi, and GloriFi\u2019s vice president of finance and capital markets Rodrigo Acuna is a Fermi board member.<\/p>\n Alienating allies<\/p>\n When troubles mounted earlier this year, Neugebauer began to misbehave in public. Politico reported the CEO became \u201cloud and belligerent\u201d<\/a> at a\u00a0NVIDIA conference with Commerce Secretary Howard Lutnick over whether South Korea would invest in Fermi\u2019s data center.<\/p>\n Article continues below this ad<\/p>\n At the CERAWeek conference in Houston, the billionaire argued on stage with Amanda Peterson Corio<\/a>, Google\u2019s global head of data center energy. The two disagreed on whether data centers should connect to the grid, with Neugebauer alienating a potential customer.<\/p>\n Fermi fired Neugebauer a few weeks later, but his allies remain in control, according to Fuzzy Panda, a research firm<\/a> that makes money betting against companies.<\/p>\n Fermi has yet to sign a tenant for its data center project and is searching for power plant equipment. Fermi must also renegotiate a lease with<\/a> an old Perry ally, former GOP state Sen. Brandon Creighton, who is the new Texas Tech University chancellor and Fermi\u2019s landlord.<\/p>\n Stock analysts differ over Fermi\u2019s chances for survival, but on one thing they agree: The sooner Neugebauer fades into the background, the better Fermi\u2019s chances of building at least one data center, let alone a nuclear power plant.<\/p>\n Article continues below this ad<\/p>\n Award-winning opinion writer Chris Tomlinson writes commentary about money, politics and life in Texas. Sign up for his \u201cTomlinson\u2019s Take\u201d newsletter at houstonchronicle.com\/tomlinsonnewsletter<\/a>\u00a0or expressnews.com\/tomlinsonnewsletter<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Fermi America and the Texas Tech University System announced in June that it is building a first-of-its-kind behind-the-wall…\n","protected":false},"author":2,"featured_media":272853,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[27,29,28],"class_list":["post-272852","post","type-post","status-publish","format-standard","has-post-thumbnail","category-texas","tag-texas","tag-texas-headlines","tag-texas-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/272852","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=272852"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/272852\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/272853"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=272852"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=272852"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=272852"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}