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Fermi Inc.

FRMI
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Business Summary

Fermi Inc. (FRMI) is a development-stage company formed in January 2025, focused on powering artificial intelligence needs by developing and leasing large-scale, grid-independent energy generation and high-performance computing facilities . The company's core business model revolves around Project Matador, a hyperscale power and AI infrastructure campus in the Texas Panhandle, secured by a 99-year ground lease with the Texas Tech University System . Fermi Inc. intends to elect to qualify as a REIT for U.S. federal income tax purposes commencing with its short taxable year ended December 31, 2025 . As a development-stage company, Fermi Inc. has not generated revenue to date .

The company's business model is centered on developing a powered campus where it controls a 5,236-acre site in Carson County, Texas, under a 99-year ground lease, with an expanded campus expected to encompass approximately 7,570 acres . Fermi Inc. plans to develop a private energy and site infrastructure platform to support multiple powered shell buildings and a diversified, integrated power supply, including on-site natural gas-fired generation, supplemental grid-supplied power, battery energy storage systems, solar generation for energy displacement, and longer-term nuclear baseload supply . Revenue is anticipated to be generated primarily from long-term tenant lease arrangements at Project Matador, structured around contracted power capacity (megawatts) and service levels, with payments expected to include fixed monthly rent based on reserved power capacity, fixed monthly rent based on invested capital in real property improvements, and pass-through reimbursements structured as additional rent . For tenants electing to develop their own facilities, payments are expected to include ground lease rent and payments for power capacity and infrastructure made available as an incident of tenancy .

Project Matador is designed as a multi-phased development intended to deliver up to 11 GW of private power generation capacity and support up to approximately 15 million square feet of AI-ready hyperscale compute infrastructure over a multi-decade buildout timeline . The generation capacity has the potential to expand to up to approximately 17 GW, subject to additional land acquisitions and incremental permits . Phase 0, "Site Enablement and Infrastructure Readiness," involved satisfying ground lease conditions, acquiring additional acreage, finalizing grid-supplied power arrangements for 86 MW expected to be energized in the second half of 2026 and an additional 114 MW targeted for accelerated energization by year-end 2026, procuring long lead-time generation and electrical infrastructure equipment, advancing dual gas interconnections, and installing water and on-site power lines . Phase 1, "Initial Energization and Campus Activation," is designed to achieve initial commercial energization and support first tenant commissioning, including the initial 200 MW of grid-supplied capacity, deployment of seven leased GE TM2500 mobile generation units (approximately 132 MW), initial on-site generation assets (three refurbished GE 6B turbines providing approximately 114 MW, six Siemens SGT-800 turbines contributing approximately 300 MW, and three Siemens F-class turbines each providing approximately 240 MW), and initial deployment of battery energy storage systems .

For the period from January 10, 2025 (Inception) through December 31, 2025, Fermi Inc. reported a net loss of $486.379 million . Total expenses were $177.779 million, primarily consisting of general and administrative expenses . Other income (expense), net totaled $(308.600) million, which included interest income (expense), net of $3.732 million and other income (expense), net of $(312.332) million . Basic and diluted net loss per share was $(1.13) , based on weighted average shares outstanding of 467,963,408 . As of December 31, 2025, the company had cash and cash equivalents of $408.529 million , total assets of $1.413 billion , and total liabilities of $317.442 million . Property, plant, and equipment, net was $935.295 million .

General and administrative expenses for the period from January 10, 2025, through December 31, 2025, totaled $177.779 million, reflecting $132.7 million of share-based compensation expense, $11.9 million of personnel-related expenses, $21.8 million for outside professional services, and $11.4 million for other general corporate activities . Interest income (expense), net was $3.732 million, comprising $4.4 million of interest income and $0.7 million of interest expense, with $18.4 million of interest capitalized to Property, plant and equipment, net . Other income (expense), net of $(312.332) million included a $173.8 million charitable contribution expense, a $61.0 million fair value loss on Series B Convertible Notes, $46.4 million of fair value losses on embedded derivative liabilities, and a $23.7 million inducement expense .

During the period, net cash used in operating activities was $34.151 million , net cash used in investing activities was $570.260 million, primarily for investments in property, plant, and equipment , and net cash provided by financing activities was $1.012 billion . Financing activities included $745.631 million from the IPO, $107.552 million from Preferred Units issuance, $100.0 million from the Macquarie Term Loan, $75.5 million from Series A Convertible Notes, and $26.124 million from Seed Convertible Notes .

Significant operational developments include the final approval from TCEQ on February 25, 2026, for an approximately 6 GW natural gas-fired air permit , and the filing of an additional application on March 27, 2026, for an incremental 5 GW air permit . The company secured firm natural gas supply arrangements with Energy Transfer for up to approximately 300,000 MMBtu per day , and partnerships with the City of Amarillo and Carson County for water supply and tax abatements . Agreements were also announced to support long-lead procurement planning and development readiness for Westinghouse AP1000 nuclear power units , and the NRC initiated an environmental review for the COL application for four Westinghouse AP1000 reactors .

Business Outlook

Fermi Inc. does not expect to generate operating revenues until definitive lease agreements with tenants are executed and delivery of leased powered shell capacity and associated private power and site services commences at Project Matador, which is currently targeted for the first half of 2027 . The company does not expect to generate material amounts of REIT taxable income in the near term due to significant anticipated capital investments and large amounts of non-cash depreciation expense . However, as REIT taxable income is earned, the policy will be to pay dividends equal to all or substantially all of the REIT taxable income .

The company's near-term operational focus is on Phase 1, which aims to achieve initial commercial energization of the campus and support first tenant commissioning . This phase includes initial energization of up to 200 MW of grid-supplied capacity from SPS, with 86 MW expected in the second half of 2026 and an additional 114 MW targeted for accelerated energization by year-end 2026, though this may extend into 2027 . Phase 1 also involves deploying seven leased GE TM2500 mobile generation units (approximately 132 MW), initial on-site generation assets (three refurbished GE 6B turbines providing approximately 114 MW, six Siemens SGT-800 turbines contributing approximately 300 MW, and three Siemens F-class turbines each providing approximately 240 MW), and initial battery energy storage systems . The company expects to begin staged energization and commercial operation of approximately 1.5 GW of simple cycle capacity beginning in the first half of 2027 .

Phase 2, "Scaled Natural Gas Buildout and Combined Cycle Expansion," is expected to transition the campus into sustained, multi-gigawatt operations, driven by binding tenant lease agreements and project-level financing . This phase includes converting initial simple cycle assets to combined cycle operation, deploying additional Siemens SGT-800 units, and expanding campus infrastructure . By the end of 2028, Phase 2 is expected to enable the campus to reach approximately 2.5 GW of gas-fired power capacity . The company expects its gas-fired generation portfolio to be capable of producing nearly 2.0 GW of power by the end of 2027, inclusive of 1.5 GW in simple cycle mode and roughly 500 MW of added combined cycle back-end generation capability .

Phase 3, "Construction of the First Nuclear Reactor and Continued Buildout of Gas Generation Capabilities," contemplates the development and construction of nuclear baseload generation capacity, starting with the initial 1 GW Westinghouse Reactor . Construction is expected to begin promptly following NRC approval for the initial combined license (COL) application and orders for major long lead-time equipment, with a five-year construction cycle estimated once these milestones are achieved . The company filed a COL application with the NRC for four Westinghouse AP1000 reactors on June 17, 2025, which was accepted for review on September 5, 2025 . Fermi Inc. has also entered into a FEED agreement with Hyundai Engineering & Construction Co., Ltd. and a forging material readiness agreement with Doosan Enerbility Co., Ltd. to support nuclear development .

Phase 4, "Expansion of Infrastructure and Construction of Additional Nuclear Reactors," represents the long-term expansion to a fully scaled, multi-tenant powered campus . This phase is designed to include the staged construction of Westinghouse Reactors (Units 2 through 4) for up to approximately 4.0 GW of additional large light-water reactor capacity, and supplemental small modular reactor (SMR) capacity, aiming for total nuclear capacity of up to approximately 6.0 GW across two nuclear islands . Total gas-fired capacity is expected to reach up to approximately 11 GW upon full buildout, providing flexibility to achieve the full 11 GW campus buildout entirely through natural gas-fired generation independent of the nuclear development timeline . With additional acreage, the campus has the potential to support up to 17 GW of total generation capacity .

The company anticipates deploying its capital resources for civil site preparation, procurement and installation of power infrastructure, NRC licensing, construction of modular powered shell facilities, and capitalization of early-phase SPEs . Incremental capital expenditures for Phase 0 and Phase 1 are estimated to exceed $3 billion in aggregate, with approximately $2 billion expected in the next twelve months . Total capital needs across all phases could range from approximately $70 billion to $90 billion . Fermi Inc. expects its liquidity to be supported by IPO proceeds, existing equipment financings, anticipated tenant prepayments, project-level debt, strategic equity capital, vendor financing, federal energy tax credits, government grants, and property tax abatements .

Risk Factors

Fermi Inc. faces substantial risks as a development-stage company with no operating history or historical revenue, including execution risk across all major business components and the challenge of securing binding tenant contracts and project financing . The company requires significant additional capital, potentially exceeding $3 billion for Phase 0 and Phase 1, and up to $70 billion to $90 billion for all phases, which may not be secured on acceptable terms or at all, leading to construction delays and increased costs . Supply chain disruptions, high demand for industrial gas-fired turbines with lead-times up to seven years, and the limited availability of skilled labor for nuclear construction pose significant risks to project timelines and costs . The development of Westinghouse Reactors and SMRs is costly, time-consuming, and subject to extensive NRC regulation, with potential for delays and cost overruns . The proximity of Project Matador to the Pantex Plant introduces potential federal scrutiny, national security protocols, and the risk of catastrophic incidents . The company is exposed to technology obsolescence, particularly if advancements in AI or chip efficiency reduce demand for power-intensive data centers . Commodity price volatility, especially for natural gas, could impact economic viability if costs cannot be passed through to tenants . Geopolitical risks, including cyberattacks and physical disruptions by nation-state actors, pose a high threat to the integrated energy and compute infrastructure, potentially leading to service outages, data loss, or physical damage . Environmental and community opposition, including permit challenges and litigation, could delay development or increase costs, particularly concerning the approximately 6 GW TCEQ air permit and future permits . Failure to maintain REIT qualification due to complex requirements, asset diversification rules, or income source limitations could result in substantial tax consequences .

Management Priorities

Management emphasizes that Fermi Inc. exists to power the artificial intelligence needs of tomorrow, building a private power campus for AI-centric customers by developing and leasing large-scale, grid-independent energy generation and high-performance computing facilities purpose-built for the hyperscale era. The strategic priorities for the period ahead include advancing Project Matador through its multi-phased development, securing definitive tenant lease agreements, and obtaining project-level financing to support the initial tenant campus. Management has communicated that they do not currently expect to have 1.1 GW of power online by the end of 2026, as previously contemplated, but continue to expect to achieve their longer-term objective of reaching approximately 2.0 GW of gas-fired and grid-supplied power online by the end of 2027 , subject to completion of installation, commissioning, securing project financing, and tenant readiness milestones. The overall tone reflects a disciplined approach to capital deployment, prioritizing contractual tenant commitments and financing readiness before accelerating large-scale construction activity.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Overview
  2. [2] Item 1, Business — Overview
  3. [3] Item 1, Business — Overview
  4. [4] Item 1, Business — Overview
  5. [5] Item 1, Business — Our Business Model
  6. [6] Item 1, Business — Our Business Model
  7. [7] Item 1, Business — Our Business Model
  8. [8] Item 1, Business — Our Business Model
  9. [9] Item 1, Business — Overview
  10. [10] Item 1, Business — Overview
  11. [11] Item 1, Business — Development Strategy and Plan of Operations
  12. [12] Item 1, Business — Development Strategy and Plan of Operations
  13. [13] Item 7, MD&A — Results of Operations
  14. [14] Item 7, MD&A — Results of Operations
  15. [15] Item 7, MD&A — Results of Operations
  16. [16] Item 7, MD&A — Results of Operations
  17. [17] Item 7, MD&A — Results of Operations
  18. [18] Item 7, MD&A — Liquidity and Capital Resources
  19. [19] Item 8, Consolidated Balance Sheet
  20. [20] Item 8, Consolidated Balance Sheet
  21. [21] Item 8, Consolidated Balance Sheet
  22. [22] Item 7, MD&A — General and Administrative
  23. [23] Item 7, MD&A — Interest Income (Expense), Net
  24. [24] Item 7, MD&A — Other Income (Expense), Net
  25. [25] Item 7, MD&A — Cash Flows Used in Operating Activities
  26. [26] Item 7, MD&A — Cash Flows Used in Investing Activities
  27. [27] Item 7, MD&A — Cash Flows Provided by Financing Activities
  28. [28] Item 7, MD&A — Cash Flows Provided by Financing Activities
  29. [29] Item 1, Business — Air Permitting and Regulatory Milestones
  30. [30] Item 1, Business — Air Permitting and Regulatory Milestones
  31. [31] Item 1, Business — Natural Gas Supply and Fuel Infrastructure
  32. [32] Item 1, Business — Water Supply and Local Partnerships
  33. [33] Item 1, Business — Nuclear Development and Strategic Partner Progress
  34. [34] Item 1, Business — Nuclear Development and Strategic Partner Progress
  35. [35] Item 7, MD&A — Overview
  36. [36] Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Dividends
  37. [37] Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Dividends
  38. [38] Item 1, Business — Development Strategy and Plan of Operations
  39. [39] Item 1, Business — Development Strategy and Plan of Operations
  40. [40] Item 1, Business — Development Strategy and Plan of Operations
  41. [41] Item 1, Business — Near Term Power Ramp Strategy and Secured Capacity
  42. [42] Item 1, Business — Development Strategy and Plan of Operations
  43. [43] Item 1, Business — Development Strategy and Plan of Operations
  44. [44] Item 1, Business — Development Strategy and Plan of Operations
  45. [45] Item 1, Business — Expected Multi-Gigawatt Natural Gas Ramp by End of 2027
  46. [46] Item 1, Business — Development Strategy and Plan of Operations
  47. [47] Item 1, Business — Development Strategy and Plan of Operations
  48. [48] Item 1, Business — Development Strategy and Plan of Operations
  49. [49] Item 1, Business — Development Strategy and Plan of Operations
  50. [50] Item 1, Business — Development Strategy and Plan of Operations
  51. [51] Item 1, Business — Development Strategy and Plan of Operations
  52. [52] Item 1, Business — Development Strategy and Plan of Operations
  53. [53] Item 1, Business — Development Strategy and Plan of Operations
  54. [54] Item 7, MD&A — Planned Use of Capital
  55. [55] Item 7, MD&A — Planned Use of Capital
  56. [56] Item 7, MD&A — Planned Use of Capital
  57. [57] Item 7, MD&A — Sources of Liquidity
  58. [58] Item 1A, Risk Factors — Risks Related to Our Business and Industry
  59. [59] Item 1A, Risk Factors — We will require significant additional capital to construct and complete Project Matador, and we may not be able to secure such financing on time with acceptable terms, or at all, which could cause delays in our construction, lead to inadequate liquidity and increase overall costs.
  60. [60] Item 1A, Risk Factors — We may face significant construction delays and global supply chain disruptions that could materially impact project timelines and costs.
  61. [61] Item 1A, Risk Factors — Westinghouse Reactors and SMRs can be costly and time consuming to construct and commercialize. Delays and cost overruns arising from issues with our procurement, regulatory approvals, construction and commercialization of nuclear reactors may materially adversely affect our business.
  62. [62] Item 1A, Risk Factors — The proximity of the Project Matador Site to the Pantex Plant introduces potential federal scrutiny.
  63. [63] Item 1A, Risk Factors — Technological advances or disruptive innovations, specifically advancements in AI, may outpace our development cycle, and we are exposed to technology obsolescence across all major asset classes.
  64. [64] Item 1A, Risk Factors — Commodity prices (particularly for natural gas) could impact the economic viability of our businesses or impair our ability to commence operations if we are not able to adequately pass through the cost of natural gas and other raw materials to our tenants.
  65. [65] Item 1A, Risk Factors — Our operations and infrastructure may be materially adversely affected by geopolitical risks, including cyberattacks and physical disruptions by nation-state actors and other hostile parties.
  66. [66] Item 1A, Risk Factors — We may be subject to opposition from environmental groups, litigation, or reputational campaigns, which could delay permitting or reduce site flexibility.
  67. [67] Item 1A, Risk Factors — We intend to be classified as a REIT for U.S. federal income tax purposes commencing with our short taxable year ended December 31, 2025. Our failure to qualify or maintain our qualification as a REIT for U.S. federal income tax purposes would reduce the amount of funds we have available for distribution and limit our ability to make distributions to our shareholders.
  68. [68] Item 1, Business — Update to Development Timeline and Power Ramp Expectations

Analysis on 5/21/2026