Fermi Inc. (FRMI) experienced a sharp rally on Wednesday, with shares climbing approximately 24% to $6.99 on volume exceeding 30 million shares. The surge followed reports that OpenAI is in discussions to lease a massive data-center campus in Ohio, which sparked investor enthusiasm for companies positioned to provide power-ready infrastructure for AI development.
The news, initially reported by Reuters, indicates that OpenAI is exploring a 10-gigawatt data center project on federal land in Ohio, with potential financial backing from Nvidia. However, the development would be led by SB Energy, a subsidiary of SoftBank, not Fermi. The company has not been identified as a participant in the project, and the stock movement appears to be driven by speculative trading rather than concrete news about Fermi securing a tenant.
Fermi has been positioning itself as a developer of large-scale AI infrastructure campuses, with its flagship Project Matador in Carson County, Texas. The planned facility is designed to offer approximately 11 gigawatts of capacity, with potential expansion to 17 gigawatts pending additional land acquisitions and permits. The company has secured a 6-gigawatt clean-air permit from the Texas Commission on Environmental Quality and has applied for an additional 5-gigawatt permit, which would cover the entire site's natural gas-powered operations.
Despite these developments, Fermi has yet to generate any revenue. In its most recent quarterly filing, the company stated that it has not signed any tenant agreements and expects nearly all future revenue to come from lease rental income from large hyperscaler tenants. The company's ground lease with Texas Tech University System includes a notice-to-proceed trigger that requires a Phase 1 tenant lease covering at least 200 megawatts by December 31, 2026.
The lack of tenant commitments and revenue has left Fermi's stock trading well below its initial public offering price of $21 from 2025. Even after Wednesday's gains, the stock remains at roughly one-third of that level. The company has warned that it will face a liquidity squeeze without a tenant and additional capital, with Phase 0 and Phase 1 capital expenditures potentially exceeding $3 billion and total project costs estimated between $70 billion and $90 billion.
Investors are now focused on Project Matador, looking for any signs of a binding lease, tenant prepayment, or new project-level financing. The speculative nature of the recent rally is underscored by the fact that Reuters has not independently verified the OpenAI Ohio talks, and Fermi was not mentioned as a participant. The company has not issued any official statement regarding the reports.
The broader market context highlights the intense demand for AI infrastructure, with major players like OpenAI and Nvidia seeking to secure power and computing capacity. This dynamic has fueled interest in developers like Fermi, but the lack of concrete agreements and revenue generation suggests that the stock's recent gains may be premature.
