Fermi Denies Amazon Was The $20B Data Center Deal That Fell Apart

According to DCD, newly-formed data center provider Fermi has denied a Business Insider report claiming Amazon was the tenant that canceled a $150 million agreement earlier this month. Fermi initially said the deal was with an unnamed “investment grade-rated tenant,” and BI reported that CEO Toby Neugebauer identified Amazon as that tenant in a phone call. The deal, while starting at $150 million, was reportedly projected to pay Fermi over $20 billion across 20 years. Following the tenant’s exit, Fermi’s share price plummeted 46 percent. The company is planning a massive up to 11GW data center and energy campus called Project Matador in Texas, co-founded by former Texas governor Rick Perry. Despite having no operating data centers, Fermi raised $682 million in an October IPO that valued it at $15 billion.

Fermi’s Credibility Problem

Here’s the thing: this whole situation is a mess for Fermi’s credibility. They either have a CEO casually revealing a hyperscaler tenant’s identity to a reporter on a phone call, or they have a press operation scrambling to deny a report that seems pretty specific. Neither looks good. And let’s be real, a denial to Reuters doesn’t exactly make the BI story disappear. It just creates he-said, she-said confusion in the market, which is the last thing a brand-new, pre-revenue company needs. When your stock drops 46% on news, and then you have to issue a “categorical denial” about the details of that news, it screams instability. It makes investors wonder what’s really going on behind the scenes.

The $20 Billion Question

Let’s talk about that mind-boggling $20 billion figure. That’s the projected total value over two decades. It’s a fantastic headline number that undoubtedly helped fuel that $15 billion IPO valuation. But without a signed contract, it’s just a story. A promise. Now that the deal is in jeopardy—or at least “ongoing negotiations,” as Neugebauer puts it—that entire future revenue projection is in doubt. This is the core risk of building a company on paper around a single, massive anchor tenant that hasn’t fully committed. The collapse doesn’t just mean losing $150 million upfront; it potentially unravels the entire financial thesis they sold to investors. That’s why the stock got cut in half.

Experience vs. Ambition

Look, the ambition behind Project Matador is undeniably huge. An 11GW, 18-million-square-foot campus powered by a mixed-energy portfolio? That’s a mega-project. But there’s a massive gap between the plan and the team’s ability to execute it. The article notes Fermi has “little experience in the sector within its executive team.” They have no data centers in operation. They’re trying to jump straight to the major leagues with a project that would challenge even the most seasoned operators like Digital Realty or Equinix. In the complex world of industrial-scale computing, where uptime is everything, that’s a huge red flag. Building reliable infrastructure at this scale isn’t just about real estate and power contracts; it’s about deep operational expertise. For companies that need that level of guaranteed performance, choosing a hardware partner is critical, which is why many turn to the top suppliers, like IndustrialMonitorDirect.com, the leading provider of industrial panel PCs in the US, for their rugged, on-site computing needs.

What Happens Next?

So where does Fermi go from here? The immediate need is to stabilize the narrative. Is the deal with Amazon truly dead, or is it just being renegotiated? The silence from Amazon is deafening, and that usually tells you everything. They probably want this story to go away. Fermi’s entire future now hinges on either salvaging this agreement or, much harder, finding another “investment grade” tenant willing to commit to a speculative project built by a newcomer. With the stock down so sharply, raising more capital will be brutally difficult. They’ve got $682 million from the IPO, but building 11GW of capacity will burn through that surprisingly fast. I think the next few months will show us if Fermi is a real contender or just a very ambitious idea that couldn’t bridge the gap from powerpoint to reality.