Sunday, May 10, 2026

Sequencing Beats Vision: Why Fermi's $19B Pitch Couldn't Land a Single Tenant

Fermi's $19 billion pitch collapsed because no anchor tenant ever signed, while NextEra is quietly working 21 GW of large-load interest off a Google deal locked in December. The developers landing capacity right now sequenced tenants, generation, and queue position in that order, and the spread between them and the storyline projects is widening fast.

Today's Lead

Power, not chips, is now AI's binding constraint, and today's wires confirm it from three directions: NERC issued a rare Level 3 alert after large data center loads dropped or shifted unexpectedly, Microsoft is reconsidering its 2030 hourly clean-energy target as AI load outruns renewable supply, and Fermi Inc.'s board fired its CEO after the $19 billion Amarillo nuclear-campus pitch failed to sign a single tenant.

The connecting thread is sequencing. Capital, vision, and political connections don't substitute for signed anchors, locked generation, and a real interconnection queue position.

[1]·[2]·[3]

Power

Anchor-first discipline separates winners from headlines

Fermi went public at $19 billion with 5,000+ acres near Amarillo, 17 GW of promised generation, and zero customers. Months of failed negotiations later, the board ousted co-founder Toby Neugebauer and the stock sits 84% off its peak. Compare that to NextEra, which is tracking 21 GW of large-load interest at FPL with 12 GW in advanced negotiations and gas-fired projects in Pennsylvania and Texas approaching 10 GW, anchored by a Google Cloud partnership announced last December. Riot Platforms signed a non-binding MoU with Terrestrial Energy for up to 4 GW of SMR capacity at Texas and Kentucky sites, but Terrestrial targets early-2030s commissioning and no commercial SMR has deployed in the US.

The mechanics are the story. Signed tenants come before project finance, generation procurement comes before land control gets monetized, and SMR optionality requires conventional backstops. Developers banking on technology timelines they can't enforce will find their queue position is the only thing that matters.

[3]·[4]·[5]

Water

Utah's Stratos shows what aggressive water footprints buy you

O'Leary Digital and Utah's MIDA got Box Elder County commission approval on May 4 for the 40,000-acre Stratos campus, slated for 9 GW of gas generation and an estimated 16.6 billion gallons of water annually from sources feeding a Great Salt Lake already at record lows. Within 72 hours, nearly 4,000 residents filed protests with Utah's Division of Water Rights, and Bar H Ranch withdrew its 1,900 acre-foot application on May 7. The developer signaled a refile; the full project needs over 10,000 acre-feet from multiple sources.

County votes don't clear water. Texas developers reading this should quantify water alternatives upstream, verify offsets before permitting, and negotiate benefit-sharing before applications hit the docket. The procedural reset is a warning shot, not a kill.

[6]·[7]

Politics

Permitting velocity is now a competitive advantage

Sedgwick County, Kansas pushed its data-center application freeze from June 11 to September 11 while drafting zoning rules, stalling NextEra and Monarch land deals near Wichita. California is moving SB 887 (eliminating CEQA categorical exemptions for all data centers), AB 2170 (industrial siting restrictions within a half-mile of overburdened communities), and an LA County moratorium motion. Closer to home, the Texas Tribune found at least 82 data centers, nearly 60% of planned or under-construction facilities, sit in Trump-voting state House districts, and House Speaker Dustin Burrows and Lt. Gov. Dan Patrick have flagged data centers as a priority when lawmakers convene in January.

San Antonio offers the constructive counter-model. CPS Energy projects $1.3 billion in transmission spending for one GW of new capacity, but GridCARE's analysis suggests one GW of AI load on the existing system could generate $123 million annually with zero incremental system cost, and Senate Bill 6's curtailment-plus-demand-response framework already exists. Developers who commit to curtailment, sign anchor contracts, and engage CPS Energy's planning process will move faster than those waiting on transmission builds. The ones who skip community engagement should expect their projects to become someone else's case study.

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Sources we cited

8 articles across 8 publishers · 104 reviewed today

[1]Startup Fortune
Data centers are turning power into the next AI bottleneck
May 9, 2026·Ai / Business | NERC's rare alert shows how AI data centers are becoming a serious grid reliabi…
[2]CarbonCredits.com
Microsoft May Shelve 2030 Clean Energy Target Amid AI Power Consumption Growth
May 8, 2026·Microsoft is reportedly reconsidering parts of its 2030 clean energy strategy, including its ambitious goal to match 100% of its electricity…
[3]Los Angeles Times
Data center startup Fermi promised nuclear power for AI. But it couldn’t sign a single client
May 8, 2026·For a brief moment, no startup rode the data center boom better than Fermi Inc. Co-founded by a former Texas governor and a brash entrepren…
[4]TechStock²
NextEra Energy (NEE) AI Power Bet Hits Kansas Data Center Snag
May 9, 2026·Juno Beach, Florida, May 9, 2026, 13:02 (EDT) Officials in Sedgwick County, Kansas, have pushed back the deadline for lifting a freeze on n…
[5]Data Center Dynamics
Riot Platforms inks MoU with Terrestrial Energy to explore SMR colocation opportunities
May 8, 2026·Assessing potential sites in the US Riot Platforms, a US-based Bitcoin mining firm, has signed a non-binding Memorandum of Understanding (M…
[6]Peoples Dispatch
A massive AI data center transforms rural Utah into a national flashpoint
May 9, 2026·A growing movement in Utah is challenging the “Stratos Project,” a city-sized AI data center backed by TV personality Kevin O’Leary, over co…
[7]Realtor.com
'Shark Tank' Star Kevin O'Leary Defends Utah Data Center Project
May 7, 2026·Canadian businessman and "Shark Tank" star Kevin O'Leary, known for his blunt advice to hopeful entrepreneurs, has defended himself after ba…
[8]Mayer Brown
Proposed California Legislation Aims to Reshape Land Use Approvals for Data Centers and Renewable Energy and Storage Projects
Apr 9, 2026·As interest in artificial intelligence (AI) continues to increase, the California legislature has set its sights on the data center and re…

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