Fermi secures Amazon computing deal for Texas data centre project

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Fermi secures Amazon deal

Highlights

Fermi signed a 600-megawatt power agreement with Amazon, including a $200 million pre-payment and $15 million pre-construction deal to restart its Amarillo project.
Fermi faces financial pressure after reporting a third-quarter net loss of $141.6 million, $286.3 million in cash, and $958 million in debt, with key permits under legal challenge.
A $6.5 billion deal with Tensorwave collapsed, while Amazon is expected to build its own data centres on Fermi's Amarillo site as part of the revived agreement.

Amazon deal revives Amarillo project timeline

As first reported by Financial Times, Fermi said it has signed a 600-megawatt power agreement with an unnamed hyperscaler that people familiar with the matter identified as Amazon, with the arrangement set to begin next year.

The agreement marks a sharp turn for the Texas-based company after negotiations between the two sides collapsed last December. Lee McIntire, Fermi’s chief executive, said on Thursday that the deal includes a $200 million pre-payment to help fund construction, while the companies have also signed a $15 million pre-construction agreement and are finalising $90 million for construction materials.

Fermi said it will commence work on its Amarillo site by December 1, although it did not specify when the full agreement will be finalised. People familiar with the matter said Amazon is expected to build its own data centres on the site.

The company still needs to secure financing and meet conditions linked to its 99-year land lease with Texas Tech University. Those terms include signing a definitive agreement with a tenant taking at least 200MW by December 31.

Permitting advantage meets financial and legal pressure

Fermi was launched in early 2025 by former U.S. energy secretary Rick Perry and energy financier Toby Neugebauer, pitching what it said would be the world’s largest data centre campus with its own power supply on more than 5,000 acres near Amarillo. The project drew strong investor interest when the company floated in October 2025, briefly pushing its valuation above $19 billion.

That momentum then faded after Amazon withdrew a $150 million investment and talks with Oracle also deteriorated. In April, Neugebauer was ousted amid allegations that his behaviour damaged ties with prospective customers, claims he denies, and the dispute triggered a wider boardroom fight over a possible sale of the company.

Fermi said it has five gas turbines on site, 4.6 miles of natural gas lines and 300 acres prepared, alongside 6 gigawatts of secured air permits and gas commitments of 220,000 MMBtu. Chief commercial officer Anna Bofa said on an earnings call that the company’s permitting work is a competitive strength as Texas moves to restrict new data centre developments.

That advantage is not removing wider strain on the business. Fermi reported a third-quarter net loss of $141.6 million on Thursday and held $286.3 million in cash against roughly $958 million in debt, while its permits are being challenged in court and a $6.5 billion agreement with neocloud Tensorwave signed in August has also collapsed.

Earlier, we discussed an S&P Global Ratings webinar on hyperscaler credit risks tied to AI-driven infrastructure demand.

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