TLDR
- Fermi Inc.’s first tenant terminated a $150 million construction agreement on December 11, 2025
- No funds were drawn under the Advance in Aid of Construction Agreement (AICA) before termination
- Both parties continue negotiating lease terms for the Project Matador facility in Texas
- Fermi has begun talks with several other potential tenants for 2026 power delivery
- Company maintains confidence in meeting power delivery schedule due to strong AI infrastructure demand
Fermi Inc. announced on December 12, 2025, that its first tenant has terminated a major construction funding agreement. The termination affects the Project Matador Site in Amarillo, Texas.
The tenant notified Fermi on December 11 that it was ending the Advance in Aid of Construction Agreement (AICA). This agreement, signed on November 3, 2025, would have provided up to $150 million to fund construction costs.
No money was ever drawn from the AICA before the termination. The timing came just two days after an exclusivity period expired at midnight on December 9.
The relationship between Fermi and this tenant started in September 2025. On September 19, the two parties signed a non-binding letter of intent for the investment grade-rated tenant to lease part of Project Matador.
The AICA followed in November as a step toward making that lease happen. But things didn’t go as planned.
Lease Talks Continue Despite Setback
Even though the construction agreement is dead, lease negotiations are still alive. The first tenant and Fermi continue discussing terms for a lease at Project Matador under the original letter of intent.
This means the door isn’t completely closed on this relationship. The tenant just isn’t willing to commit construction funds right now.
Fermi isn’t putting all its eggs in one basket anymore. After the exclusivity period ended on December 9, the company started talking to other potential tenants.
These discussions focus on power delivery at Project Matador in 2026. Having multiple prospects in the pipeline could actually strengthen Fermi’s position.
Company Remains Confident
Fermi’s management issued a statement expressing confidence in the project’s future. The company believes it can still meet its expected power delivery schedule at Project Matador.
The reasoning comes down to market demand. Fermi says the need for behind-the-meter power for artificial intelligence applications remains strong.
This demand exists in both the near term and long term, according to the company. That’s the core of their optimism despite losing the construction agreement.
Project Matador is designed to provide power infrastructure for AI operations. These facilities require massive amounts of electricity delivered directly to their sites.
The behind-the-meter setup allows customers to get power without going through traditional utility infrastructure. It’s becoming increasingly popular for data centers and AI facilities.
For investors, the news creates some uncertainty about timing. The project might take longer to get going without the first tenant’s construction funding.
But the continued lease negotiations and new tenant discussions suggest the project isn’t dead. Fermi just needs to find the right partner or partners willing to commit.
The company filed the update as a regulatory disclosure on Form 8-K. This keeps shareholders informed about material changes to business agreements.
Fermi continues lease negotiations with the original tenant while pursuing several other potential tenants for 2026 power delivery at Project Matador.
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