Fermi paid $25 million to delete the only test of AI demand at its Texas campus

Fermi▼−6.04% — Fermi, down 6.04 percent today (Nasdaq: FRMI) paid its lenders $25 million this morning to erase the one test that would have shown whether an AI tenant wants its site ¹. Its February equipment loan from Japan's MUFG Bank required, by November 10, a lease or offtake, a contract to take a project's power or capacity, covering 400 megawatts at Project Matador, its campus in the Texas Panhandle ¹. The amendment filed today↗ deletes the requirement and the penalty for missing it ¹.

By Fermi's own estimate, that penalty would have forced about $56 million of principal payments across the next three quarters, and the amendment removes them ¹. The lenders keep their fee and their collateral, the Siemens gas turbines now sitting at the site ²³. Shareholders keep waiting for a tenant.

The deferral covers every quarter left before the loan matures

The February facility was a $500 million turbine warehouse line↗, a loan secured by equipment bought for the project, and MUFG held it alone ²³. From November 10, quarterly principal was set to run at 10 percent of the balance instead of 5 unless Fermi had 400 megawatts of leases or offtake signed ². The waiver deletes that step-up ¹.

The quarters it defers run through June 2027, the last full ones before the facility matures in August 2027, so the schedule Fermi bought out of ends at a refinancing wall ². MUFG stays on as administrative agent, now for a new syndicate of lenders ¹.

The power is built; the demand is still future tense

Fermi controls the half of the problem it set out to solve: land, permits, more than $1.5 billion spent, and a campus designed to ramp to 17 gigawatts ⁴. The half it cannot build is signed demand. The deleted covenant asked for 400 megawatts of that ¹.

TensorWave, an AI cloud running AMD's▼−5.74% — AMD, down 5.74 percent today Instinct GPUs, signed the only lease so far, in August↗, for 222 megawatts ⁴. The 15-year contract carries about $6.5 billion of expected revenue, and it is still not effective ⁴. Closing has already been pushed once, to October 31↗, and the conditions include project-level financing ⁵. Even fully effective, the lease left the deleted test about 178 megawatts short ¹².

AMD's guarantee starts only when the rent does

AMD's backing, announced on October 13↗, lifted the stock 16 percent ⁶. But the chipmaker's credit support starts only when construction finishes and rent begins on the final delivery phase, which completes in early 2028 ⁷. Nothing credit-backed covers the construction period the turbine loan is financing.

Shareholders now hold the demand risk, and two dates decide it

Fermi has booked no revenue, its cash has drained into the buildout, and its June filing still raised going-concern doubt↗ about its ability to keep operating ²⁷. The demand itself is real: a signed 15-year lease and a chipmaker's guarantee are evidence that AI builders want this power ⁴⁶. What Fermi deleted today was the lenders' way of checking whether it arrives at Matador on time ¹.

Two dates now carry that question. By October 31, the TensorWave lease must close, with project-level financing among the conditions ⁵. By December 31, Fermi must issue its notice to proceed, the formal order to begin construction↗, under its ground lease with the Texas Tech University System, the landowner at Matador, which can terminate the lease if the notice is late ².

The 400-megawatt test no longer exists on paper. Its work falls to the two dates above, and to whoever signs the capacity TensorWave does not cover ².