Hyperscaler Puts $200 Million Down for 600 MW at Fermi's Project Matador Before a Lease

Fermi Inc., which does business as Fermi America, announced on November 12, 2026 that an undisclosed investment-grade hyperscale customer has signed a series of agreements backing the development of 600 MW of power capacity at Project Matador, a major US data center development, according to dev.to. The centerpiece is a $200 million prepayment, committed before any lease has been executed, and the news landed alongside the company's third quarter 2026 financial results.

Three agreements, one still pending

The $200 million prepayment agreement provides substantial upfront customer funding tied to the proposed 600 MW development, dev.to reports. A second agreement, worth $15 million, covers early construction and site development, and is meant to establish a framework for pushing site preparation forward fast enough to hold the customer's desired schedule.

A third arrangement, a $90 million purchase agreement for structural steel and building materials, is still being finalized. Under that contemplated deal, the customer would draw on long-lead materials Fermi secured in advance, which the company says would accelerate the customer's planned construction of multiple data center facilities at the site. Fermi said it and the customer continue to work toward a definitive long-term lease as well as completion of the steel purchase agreement. The customer's name was not disclosed.

Selling speed to power

Chief Executive Officer Lee McIntire framed the deals as validation of Fermi's strategy. Hyperscalers, he said, want sites that already come with permitted power, and he claimed Project Matador is one of the few that can meet that demand today. "Our headstart in speed to power is a key reason an investment-grade hyperscaler has signed up for 600 megawatts and committed more than USD 200 million up front," McIntire said in the announcement, referencing the additional $90 million contemplated.

He added that the agreements fit Fermi's approach of investing early in infrastructure readiness so that customers inject capital earlier in the project's lifecycle, converting power and infrastructure advantages into long-term revenue with, in his words, "little or no dilution." McIntire described the arrangements as what the company believes is "just the start" of converting its customer pipeline. If prospective customers convert into leases, he said, Fermi's current 2.2 GW of capacity would be completely filled, moving the company out of its pre-revenue, pre-lease status and into its next phase of growth.

TensorWave lease terminated

The announcement was not uniformly positive. In the same disclosure, Fermi reported that it and TensorWave have terminated the Data Center Lease and Services Agreement the two companies signed in August 2026, and that the AMD credit support agreement associated with TensorWave has also been terminated, according to dev.to. The timing is a reminder that arrangements in this market, whether leases or prepayments, can unwind before definitive documents are in place.

Texas Tech partnership continues

Fermi said it and the Texas Tech University System continue to work together on Project Matador, including meeting the land lease conditions required before vertical construction can begin. Chancellor Brandon Creighton reaffirmed the partnership during the week of the announcement, stating that Texas Tech "remains firmly committed to the success of Project Matador."

Why it matters

The deal illustrates how the AI buildout is reshaping what data center customers are actually paying for. A hyperscaler is willing to hand over $200 million up front, with another $15 million committed and $90 million contemplated, for a site where a long-term lease does not yet exist. What is being secured is not floor space but access to permitted power on a specific timeline, which Fermi argues is now the scarce commodity.

For Fermi, customer-funded construction with minimal dilution is a way to bridge its pre-revenue phase, and converting the rest of its pipeline would fill 2.2 GW of capacity. But the simultaneous termination of the TensorWave lease shows the volatility on the other side of the ledger. Until definitive lease documents are signed at Project Matador, the prepayment is a strong signal of intent rather than contracted revenue, and construction milestones, starting with the land lease conditions, remain the ones to watch.