Fermi Proxy: Project Matador Advances as Tenant Deal, Board Fight Linger

By Ed Moltzen

Fermi, the Texas-based energy and data center company, says it has signed the first tenant for its 11-gigawatt Project Matador campus and received a 6-gigawatt air permit, according to a proxy statement filed with the SEC.

The lease has yet to close. In a Sept. 22 press release, Fermi said the closing had been pushed from Sept. 30 to Oct. 31 while it finalizes a guaranty from an investment-grade counterparty.

The filing, dated Oct. 2, comes ahead of an Oct. 30 shareholder meeting at which former CEO and co-founder Toby Neugebauer’s fight with the board remains an issue. Fermi is asking investors to elect two directors, including former Energy Secretary Rick Perry, and ratify its auditor.

“Our remaining work is to finalize the lease guaranty with our counterparty,” CEO Lee McIntire said in a Sept. 22 press release announcing a one-month extension of the closing on Fermi’s lease with TensorWave. “Those discussions are active, constructive and progressing, and we look forward to closing and delivering Project Matador’s first data center for TensorWave.”

A tenant lease with conditions

Before TensorWave, an unnamed investment-grade prospective tenant signed an agreement in November 2025 to advance up to $150 million toward construction. It terminated that agreement in December 2025. No funds had been drawn.

Fermi signed a 15-year lease with TensorWave in August for a build-to-suit data center supported by 222 megawatts of facility power. The company estimates about $6.5 billion in revenue over the initial term. TensorWave has an option to expand to 650 MW. Delivery is planned in phases from late 2027 into early 2028.

The agreement is binding, but it does not take effect until closing conditions are satisfied or waived. Those include executing work letters and guaranties, finalizing operations schedules and a service-level agreement, obtaining board approvals and securing project-level financing sufficient to fund construction of the leased premises. The Sept. 22 release said the parties moved the closing date from Sept. 30 to Oct. 31 to allow more time to finalize a guaranty of certain lease obligations with an investment-grade counterparty. All other lease terms remain unchanged and in effect. Either side can terminate if the conditions are not met.

The proxy lists the expected timing and satisfaction of those conditions among the company’s risks.

The Texas Tech University System ground lease sets another near-term test. Before vertical construction of data center buildings, Fermi must obtain a notice to proceed by Dec. 31, 2026. The notice requires a signed Phase 1 tenant lease of at least 200 MW, and Texas Tech may terminate the land lease if the notice is not received by the deadline, according to Fermi’s second-quarter report.

Power and site work

Project Matador is planned for about 11 GW of private-grid generation, with a possible expansion to about 17 GW, serving AI data centers on site. Fermi holds or expects to hold about 5,236 acres under a long-term Texas Tech lease and expects the campus to reach about 8,400 acres. Its plan combines natural gas, nuclear and solar power, with space for up to four Westinghouse AP1000 reactors. Full build-out is projected by 2038.

McIntire’s letter in the proxy says Fermi has received an air permit covering 6 GW of power and filed an application for another 5 GW. It says the first natural gas turbines have reached the site and the company was selected for a new federal pilot program to speed up nuclear reviews.

McIntire also points to an alliance that he says doubles the power Fermi can bring to market over the next two years. Under an August framework agreement, Hillcore Energy Capital would finance, build, own and operate up to about 2.6 GW of generation at Matador, beginning with about 360 MW. Fermi would buy at least half its tenants’ power needs from Hillcore on a take-or-pay basis. The parties had 90 days from signing to negotiate definitive agreements.

The proxy’s cautionary language says historical environmental conditions at the site are increasing preparation work and timelines.

The fight for control

Fermi’s board removed Neugebauer as CEO on April 17 and terminated his employment for cause on April 30. The proxy attributes that decision to a committee of independent directors, which cited alleged material misrepresentations to the board, unauthorized meetings over company transactions and a pattern of threatening and abusive behavior.

Neugebauer sued in Texas Business Court over a bylaw change and the cancellation of a special meeting he sought to call. Perry is among the directors named as defendants. The proxy says a hearing on Fermi’s motion to dismiss is scheduled for Nov. 19. In a Sept. 11 SEC filing, he said he had paused his proxy contest and submitted a shareholder proposal calling for an investment bank to review extraordinary transactions. That proposal is absent from the two items on Fermi’s annual-meeting ballot.

The proxy lists Neugebauer as beneficial owner of 22.47 percent of Fermi’s shares, including shares held by a family trust for which he is investment trustee. His stake gives him a large position in the vote over Perry and fellow nominee Jeffrey Stein. The director elections require a majority of outstanding shares.

Capital still has to follow the plan

Fermi has not generated revenue. It reported a $214.5 million loss for the first half of 2026. Unrestricted cash fell from $408.5 million at the end of 2025 to $62.5 million on June 30, while debt rose from $109.8 million to $520.1 million. A July sale of $431.25 million in convertible notes brought in about $416.8 million in net proceeds.

In its second-quarter report, Fermi said the resources it had at June 30 were insufficient to meet obligations coming due within a year, raising substantial doubt about its ability to continue as a going concern. Management said the note proceeds, undrawn equipment financing and its ability to time capital spending to tenant agreements and project financing alleviated that doubt. The filing also warned that a capital shortfall could force Fermi to surrender pledged assets and delay phases of Matador.

Fermi’s IPO prospectus projected 1.1 GW of power online by the end of 2026.