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Amazon Pulls $150M Advance from Texas Data Center
18 Dec
Summary
- Amazon withdrew a $150 million construction advance from Fermi America.
- Fermi America's stock value dropped nearly by half after the cancellation.
- The deal with Amazon was worth over $20 billion for the next 20 years.
Amazon, a prospective tenant, has withdrawn a $150 million Advance in Aid of Construction Agreement from Fermi America's 11-gigawatt data-center project in the Texas Panhandle. This withdrawal, occurring after an exclusivity period ended, caused Fermi's stock to plunge by nearly half on December 12. CEO Toby Neugebauer confirmed Amazon's identity as the tenant, noting that negotiations for a deal potentially worth over $20 billion spanning 20 years are ongoing.
Neugebauer emphasized that discussions with Amazon remain constructive, characterizing the situation as a typical negotiation for a large-scale transaction. The issue stemmed from Amazon's hesitation to commit funds after the exclusivity period concluded. Fermi America's project, codenamed Project Matador, is a significant undertaking aimed at meeting the surging energy demands of AI technology.
The company had gone public in September, raising over $680 million. The project's development hinges on a 99-year ground lease with the Texas Tech University System, which is contingent on a signed letter of intent with a tenant. Fermi America, founded less than a year prior, has seen its market valuation significantly decrease from its initial IPO.
