Backed by former U.S. energy secretary and Texas governor Rick Perry, AI power startup Fermi went from nonexistent to an October IPO with a mammoth $16 billion market cap in less than a year without any announced customers or construction—or even a single dollar of revenue.
It's a Texas political insider family affair.
Founder Rick Perry's son Griffin is an executive and fellow founder Toby Neugebauer is the son of former Congressman Randy Neugebauer.
Neugebauer ran a conservative fintech that imploded. Red Team TechGods backed him before blaming Neugebauer for bankrupting Glorifi. Neugebauer countersued. WFAA.com noted "a spokesman for Ken Griffin called Neugebauer's allegations 'fabricated nonsense.'"
Fermi America's Matador Project is on a 5,236 acre site leased from Texas Tech University. It will use both local water and power. Initial water use is up to 2.5 million gallons per day, increasing up to 10 million as the project advances.
Initial electrical power will be met by gas turbines and the local electrical utility. The State of Texas granted preliminary approval for 6 gigawatt natural gas generated power.
Fermi's SEC filing noted:
Through a combination of natural gas turbine purchases, a focus on procuring other long lead-time equipment, and negotiations with Southwestern Public Service Company (“SPS”), the local utility, we expect to secure approximately 1.1 GW of power for our operations by the end of 2026 (including an expected 200 megawatts (“MW”) from our expected contractual arrangement with SPS).Fermi will need 18.2% of its power to come from the same source as Amarillo residents. That is all new demand.
The U.S. Energy Information Administration projected Texas energy "demand will rise another 14% in the first nine months of 2026."
The SEC filing said this about water:
Project Matador’s groundwater lease with the Texas Tech University System (the “Groundwater Lease”) includes dual-aquifer fresh and salt water rights, which provides a resilient, scalable water supply for cooling and other operations. Project Matador is located directly above the Ogallala Aquifer. Within Groundwater Management Area #1, which includes eighteen of the northernmost counties in Texas, the Ogallala Aquifer had an available volume of 3.19 million acre-feet per year as of 2020 and is expected to have approximately 1.99 million acre-feet per year availability in 2080 according to the Texas Water Development Board Groundwater Division.
Add aquifer depletion to the AI "public cost" list.
Another interesting interlock is Rick Perry's role as Fermi America co-founder and Board position with natural gas pipeline company Energy Transfer. Energy Transfer is supplying the gas to Fermi per an October 2025 announcement.
Fermi America™, developing the world's largest, behind-the-meter artificial intelligence private grid campus with the Texas Tech University System, has secured an agreement with Energy Transfer, one of the largest and most diversified midstream energy companies in North America, to deliver firm natural gas supply to Fermi's HyperGrid™ campus located outside Amarillo, Texas.The press release did not mention Rick Perry's conflict of interest in this deal.
Conflicts of interest are so yesterday. They are the fabric of today's PEU world, occupied by private equity underwriters (PEU) and their new TechGod/CryptoBro brethren.
Political Red and Blue Team supporters should be prepared to shoulder the financial burden for former elected officials and their sons with Fermi America as they purloin water, power, land and avoid their tax responsibilities. Subsidies are required for the wealthy and connected. Texas politicians know how to deliver for their brethren and their children.
Eventually the four nuclear plants referred to as "the Donald Trump Generating Plant" will produce electricity and toxic waste. I thought Trump II was already at maximum toxic production. Wrong again...
Update 11-7-25: Bloomberg reported OpenAI, which will soon enter the porn market, wants CHIPS act subsidies (tax credits) to be expanded to AI data centers.
....35% chips-focused tax credit to AI data centers, AI server producers and electrical grid components, such as transformers and the specialized steel used to produce them.
It seems they want more subsidy from Uncle Sam than they are willing to pay in local taxes.
OpenAI scrambled to not look like a SNAP recipient given what their CFO said. CNN reported:
OpenAI’s Chief Financial Officer Sarah Friar raised eyebrows on Wednesday when she suggested that the US government should “backstop” the company’s aggressive investments in artificial intelligence infrastructure.“The backstop, the guarantee, that allows the financing to happen, that can really drop the cost of the financing but also increase the loan-to-value, so the amount of debt that you can take on top of an equity portion,” she said at a Wall Street Journal event.
TechGods are quickly passing the greed and leverage boys (PEU) in their calls for an "all of government" subsidy. They even got the First Lady to equate TechGods, immigrants in many cases, with the greater good.
Update 11-11-25: Fermi stock tanked today after a huge unexplained charge caused losses to soar in the hundreds of millions. Sherwood reported:
The company, which currently generates no revenue, reported a net loss of $346.8 million for its third quarter, compared to the $13.3 million loss analysts polled by FactSet were expecting. The loss was almost entirely comprised of unspecified “other expenses” totaling $309 million.
With a surprise loss like that a company needs some Alex Karp (TechGod of Spying) like diversionary blather.
Fermi compared the race to build AI infrastructure faster than China to the Manhattan Project, the initiative to build the first atomic bomb in World War II.“Not all enemies wear uniforms, but make no mistake, America is at war,” the company wrote.
Not all socialists are people. some are corporations seeking government subsidies like Fermi. Giving giant subsidies to TechGods whose products harm people, including children? That take a special kind of corporate socialist, one with zero conscience. TechGods have repeatedly shown they lack the most basic moral standards. But they know they sometimes have to give to get:
For the first nine months of 2025 Fermi reported $173.8 million in charitable contributions.
Sleazy politicians like Rick Perry are a perfect match for the AI pinheads. As a West Texan I do not want to pay a penny for their power or water.
Update 11-17-25: Tony Deden wrote:
This essay was born out of revulsion to an accidental summer reading that paraded progress as virtue and private equity as its high priest. Every paragraph spoke the same pious language of “sustainable improvement,” “societal benefit,” and “long-term value creation,” as though leverage, asset-stripping, and balance-sheet cosmetics had become moral acts. I found myself revolted not merely by the hypocrisy, but by the vacuousness of it. In our hyper-financialized society, we have come to mistake valuation for value, and activity for achievement. The word ‘progress’ has been exploited to justify anything that moves—no matter what it destroys. What follows is an act of refusal to bow to the idea that more money is progress. If this essay has a motive, it is contempt for the trivial slogans that pass as thought, and for the hollow theory that confuses financial §engineering with human improvement.Local politicians and Texas voters would be wise to read his piece.
