From Barron's, October 1:
Fermi, a Texas company aiming to power data centers with natural gas plants and nuclear reactors, is moving at the speed of AI.
Barely a concept just 10 months ago, the company’s IPO launched Tuesday night, valuing it at $13.8 billion. The stock jumped 17% to $24.50 right after it started trading on Wednesday.
Nick Davis, a lawyer at Haynes & Boone who advised on the offering, called it “mission impossible” because of the hyper-fast timeline.
AI-related IPOs have drawn strong investor demand this year, and Fermi is no exception. Founded in January, Fermi intends to build the largest data center campus in the world on a parcel of land in the Texas Panhandle that it’s leasing from Texas Tech University. The 5,236-acre site, roughly nine square miles, will eventually be home to data center warehouses hooked up to natural gas plants, nuclear reactors, solar fields, and batteries, Fermi says. In all, the site could generate five times as much electricity as the Hoover Dam by 2038, the company projects.
The stock is sure to attract attention from investors looking to cash in on the rush for electricity to power AI. But the company faces substantial challenges.
Fermi is like a car being built while it’s already in motion. The company is starting to cobble together the equipment it needs for these power plants, but so far it’s an ambitious vision without much physical progress. Buying the stock means believing that Fermi can overcome hurdles that have bedeviled better-established infrastructure companies....
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