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Amazon has thrown a lifeline to a struggling data center company co-founded by former US Energy Secretary Rick Perry, striking a deal for computing power with the company almost a year after pulling out.
Fermi, the Texas-based data center developer, announced a 600-megawatt power deal Thursday with an unnamed hyperscaler that people familiar with the matter identified as Amazon. The deal, which would come into effect next year, marks a dramatic turnaround after negotiations between the two companies broke down last December.
The deal is a rare bright spot for a company that had difficulty finding a major tenant. The company’s stock price is up 24 percent since Thursday.
Fermi declined to comment. Amazon did not respond to requests for comment.
Perry and energy financier Toby Neugebauer launched Fermi in early 2025 with a unique pitch, promising to build the world’s largest data center campus — served by its own power supply — on more than 5,000 acres near Amarillo, Texas. The project, initially named in honor of President Donald Trump, would be powered by natural gas, nuclear and renewable energy. Investors flocked to the company when it went public in October 2025, propelling its valuation above $19 billion.
But the euphoria evaporated when Amazon withdrew its $150 million investment, sending shares tumbling. Negotiations with Oracle also deteriorated.
In April, Neugebauer was ousted following allegations that his behavior damaged relationships with potential clients, which he denies, sparking a bitter boardroom battle in which he pushed for the sale of the company. By then, Fermi had lost more than 80 percent of its peak market value.
Amazon is expected to build its own data centers at the site, the sources said. Lee McIntire, Fermi’s chief executive, said Thursday the deal included a $200 million prepayment to finance construction. The companies also signed a $15 million pre-construction agreement and are finalizing $90 million for construction materials.
Although Fermi did not say Thursday when the deal would be fully finalized, it said it would begin work at its Amarillo site by Dec. 1.
Fermi must also secure financing and satisfy conditions attached to its 99-year ground lease with Texas Tech University, which includes signing a definitive agreement with a tenant taking at least 200 MW, by Dec. 31.
The company says it has five gas turbines on site, 4.6 miles of natural gas pipelines and 300 acres prepared. It also has 6 gigawatts of secure air permits and gas commitments of 220,000 MMBtu.
Fermi’s lead in securing permits could give it an advantage as Texas moves to restrict the development of new data centers. Democrat Gina Hinojosa, who defeated Republican Gov. Greg Abbott in last week’s election, promised a moratorium on new approvals, and Abbott had frozen environmental permits before the election.
Fermi remains under financial pressure, reporting a third-quarter net loss of $141.6 million on Thursday and just $286.3 million in cash versus about $958 million in debt.
“One of our advantages is that we have done the heavy lifting on permitting,” Anna Bofa, chief commercial officer, said during a earnings conference call.
However, its permits are being challenged in court. The company also said a $6.5 billion deal with Neocloud Tensorwave, signed in August, had fallen through.
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