As demand for AI data centers continues to skyrocket, a major bottleneck has emerged: a severe shortage of available power. Fermi America, a data center real estate investment trust (REIT) that positions itself as a “power-first” solution, is aiming to break this bottleneck. The company is in the midst of building a sprawling 11 gigawatt “HyperGrid,” an energy and data campus at its headquarters in Amarillo, Texas, which is slated to become the nation’s biggest combined-cycle natural gas project, utility grid power, solar power, and battery energy storage.
In order to help finance this undertaking, Fermi is planning on tapping the public markets through a dual US-UK listing. What should investors expect? Below, we leverage Tegus Expert Insights, AlphaSense’s company primer Workflow Agent, and other findings from the platform to explore Fermi, its post-IPO prospects, and the competitive dynamics of the data center REIT market.
Fermi 101
Nicknamed “Project Matador,” the vision to bring HyperGrid to life includes four full-scale Westinghouse nuclear reactors, along with 4.5 gigawatts of gas-fired power, solar photovoltaic arrays, and battery energy storage systems. While Fermi’s mission is to expand beyond natural gas-fired power, management says the company will leverage natural gas from adjacent pipeline infrastructure to scale HyperGrid up to 11 gigawatts of power generation over time.
The company acquires land, secures massive amounts of electricity directly from the grid, and handles the complex process of interconnection. It also offers optional behind-the-meter (BTM) solutions, like natural gas generators or fuel cells, to provide a temporary power source while waiting for grid connections. This allows Fermi to compress the time to power, a competitive advantage in a market with long project lead times. According to company documents, Fermi's revenue model is designed to deliver predictable, stable, long-term revenue through contracts with hyperscaler tenants, AI model developers, GPU manufacturers, and sovereign AI providers via lease agreements structured around available power capacity.
Fermi is a development-stage, pre-revenue company, meaning it provides operational milestones and capital deployment targets rather than traditional financial metrics. Company leadership has unveiled several key longer-term project milestones to monitor, including:
- 2027: First tenant revenue expected
- 2032: First nuclear reactor commissioning
- 2034-2036: Additional three reactors to be commissioned
Company Financials and Market Opportunity
Fermi’s extended path to profitability introduces uncertainty into the near-term outlook. First tenant revenue is not expected until 2027, and HyperGrid is not slated to be fully operational until 2038, with total project investment ranging from $70 billion to $90 billion. The most critical upcoming milestone: bringing 1 gigawatt online by year‑end 2026 to serve early AI loads. Fermi plans to leverage $100 million in Series C preferred equity funding and a recent $250 million loan from the Macquarie Group to ensure execution on Project Matador and secure supply chain assets.
Capacity constraints are creating a major bottleneck and lengthy grid-connection backlogs. Securing hundreds of megawatts from the grid can now take up to seven years in some regions. One expert paints a stark picture of the market, stating that key areas like Silicon Valley and Northern Virginia are “completely out of power... until 2029 really.” New builds are the only solution in many cases, as retrofitting urban sites to meet higher power demands is costly and complex, according to one industry veteran.
This severe supply-demand imbalance means that companies like Fermi that can deliver a reliable power source have a major competitive advantage.
Competition and Differentiation
Fermi operates in a rapidly consolidating sector where nuclear energy is increasingly viewed as critical. Its primary competitors include traditional utilities, independent power producers, established data center REITs like Equinix and Digital Realty, and specialized AI infrastructure providers like CoreWeave and Lambda. Fermi must also compete with hyperscalers’ efforts to self-build data centers.
The company’s core differentiator: a hybrid approach that blends reliable grid power with transitional BTM gas and novel technologies like fuel cells to ensure a steady supply. Fermi is seen as a key beneficiary of an industry-wide shift toward onsite power generation as companies seek to fortify their supply. Company estimates show that nearly 27% of data centers are expected to be fully powered by onsite energy by 2030, up from just 1% in 2024. Experts say this model offers a nimble solution to regional capacity constraints.
“Places that never had the infrastructure built out for them from a power basis are now going to be wonderful, ideal locations for data centers. Places that we've always wanted to go, just the infrastructure hadn't the opportunity to catch up…we're going to go into places that were uncharted for data centers. It's ‘bring your own power,’ and you're not relying on the public utility.”
– Former Senior Director of Facility Operations at Equinix, September 2025 Call
The Road Ahead: What to Watch for
The next 12 to 24 months are critical for Fermi, as the company aims to have a significant amount of its planned capacity energized and leased in that timeframe. Experts and company leadership have identified several factors to monitor near term, including:
Shifting regulatory landscape: The Trump administration's goal to have three new nuclear plants reach criticality by July 2026 is broadly seen as supportive. At the same time, the Federal Energy Regulatory Commission is actively developing policies for interconnection arrangements involving large loads co-located with generators. Nuclear approval processes can also take many years and involve navigating complex federal and state regulations.
Execution risks and supply constraints: Management has acknowledged that execution is a pain point as a development-stage company. The limited availability of commercially viable SMR reactors and an underdeveloped supply chain for specialized components could further impact nuclear reactor deployment timelines.
Financial pressures: Fermi faces immediate financial obligations, owing Siemens more than $134 million for equipment. Project Matador is expected to cost at least $2 billion through Phase 1 of the project, slated to finish by December 2026. A successful IPO will be crucial to supplying the needed capital and covering immediate financial obligations as management projects continued financial losses during infrastructure development phases.
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