Fermi, Texas signs power contract for 'Project Matador'… 11GW private power grid execution faces tests

Fermi (FRMI) Once Again Draws Attention for Its Ultra-Large Power Infrastructure Project in Texas. To Meet the Growing Demand for Artificial Intelligence (AI), the company is simultaneously building private power grids and generation facilities, with the market closely watching the speed at which it moves into actual project execution phases.

Centered around the 11GW “Project Matador,” the project is gradually becoming more concrete.

Fermi (FRMI) is a company known as “Fermi America,” advancing an 11-gigawatt (GW) “Project Matador” in the Texas Hill Country region. The company describes it as a next-generation private power grid park, with the core goal of providing stable electricity supply for large-scale AI infrastructure.

Recent reports focus on Fermi actively implementing power procurement and generation infrastructure for the project. The key point is that this is no longer just a conceptual stage; binding power supply contracts and equipment procurement agreements have been signed.

Signing Power Supply Contract with Xcel Energy Subsidiary

One of the most notable announcements is the power service agreement with Southwestern Public Service Company. This company is a subsidiary of Xcel Energy, and the contract involves providing up to 200 megawatts (MW) of power capacity to the Fermi park.

This is interpreted as the initial phase of Project Matador’s substantial integration into the external grid. For large-scale data centers or AI computing facilities, stable access to massive amounts of electricity is critical, and this contract indicates that Fermi is fully initiating its foundational work.

Ensuring Initial 500MW Generation Capacity via Gas Turbine Leasing

Fermi has also signed a long-term capital lease agreement with Mobile Power Solutions. The contract includes GE TM2500 gas turbines, and the company announced plans to support an initial 500MW of power generation capacity.

This move is significant for ensuring the independence and redundancy of the private power grid park—i.e., maintaining operations even during power outages, a “dual safety guarantee.” In AI infrastructure projects, power interruptions can directly lead to cost losses, so ensuring self-supplied generation equipment is a key concern for investors.

Advancing Water-Saving Technologies and Community Cooperation

Environmental and community issues are also important aspects of Fermi (FRMI) news. The company announced it has signed a non-binding Memorandum of Understanding (MOU) with MVM EGI to develop a “dry-wet hybrid cooling tower” that prioritizes air cooling combined with a closed-loop water system.

The company states this initiative aims to contribute to local water resource protection. In water-sensitive regions like Texas, water usage plans are equally important as power plans during the development of power infrastructure and data centers.

Meanwhile, agreements with the cities of Amarillo and Carson County have also been made public. These agreements include water supply, tax incentives, and reinvestment zone designations, which are interpreted as laying the groundwork for local government cooperation in the 11GW private power grid park.

Regulatory Approval and Shareholder Communication Are the Next Focus

Future market attention will be on regulatory processes, subsequent financing, and the actual progress of engineering projects. Reports indicate that Fermi has received preliminary approval from the Texas Commission on Environmental Quality for its natural gas power project. However, large infrastructure projects involve multiple stages such as permitting, equipment procurement, and local negotiations, requiring further confirmation.

Additionally, quarterly shareholder letters, performance releases, conference calls, and other investor communications are viewed as important checkpoints. The market wants to see concrete data on “when, how much, and how” the power supply capacity will be actually increased, rather than just blueprints.

Fermi (FRMI) is benefiting from the structural trend of surging AI-driven power demand. However, at this stage, the market’s evaluation is more focused on execution capability rather than grand visions. If subsequent contracts, regulatory approvals, and local infrastructure connections proceed smoothly, Fermi’s private power grid model could be regarded as a more tangible business case.

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