The $19B "Nuclear AI" Energy Startup That Couldn't Sign a Single Client

"Nuclear AI startup" Fermi had hoped to build power plants generating 17 gigawatts of electricity, remembers Bloomberg, "three times the amount typically consumed by New York City."Hyperscalers could install their data centers on the site itself and tap directly into that power, which would come first from natural gas turbines and later from nuclear reactors. The pitch ticked so many boxes - artificial intelligence, nuclear energy, political connections - that some investors found it irresistible. Fermi went public in October worth more than $19 billion in market value, despite reporting no revenue or signed customers. Now, the startup's board has fired its top executive, Toby Neugebauer, after months of negotiations failed to secure a single client. Chief Financial Officer Miles Everson left as well... Fermi's stock, meanwhile, has tumbled 84% from its peak. The company's more than 5,000-acre site in the Texas panhandle - dubbed Project Matador, or the President Donald J. Trump Advanced Energy and Intelligence Campus - remains mostly unfinished. And some analysts see a cautionary tale of the market's AI enthusiasm running ahead of reality, with investors betting on companies whose grand projects may never get built... The idea of giving data centers their own, dedicated power supply not dependent on the grid may sound tempting, but former US Department of Energy official Jigar Shah said banks don't want to finance it. The grid, drawing power from many sources, is more reliable than a handful of expensive, on-site plants, he said. He considers Fermi a failure "of monumental proportions" and says similar, off-grid data center projects elsewhere deserve more skepticism than they've received... "We're allowing these types of projects to continue to be viewed as viable when they most certainly are not," said Shah, who ran the department's Loan Programs Office during the Biden administration.... "It was a piece of dirt with a dream," an investor who visited the site in February told the short sellers, Fuzzy Panda Research.

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