--- title: "Fermi paid $25 million to delete the only test of AI demand at its Texas campus" description: "An amendment filed on October 16 erases the 400-megawatt lease covenant on Fermi's turbine loan and defers about $56 million of principal. The demand question now rests on two dates: the TensorWave lease close on October 31 and the construction-start notice Fermi owes its ground landlord by December 31." publisher: "The Inference" section: "Money" published: 2026-10-16T17:32:46.859Z modified: 2026-10-16T17:32:46.859Z canonical: https://theinference.org/article/fermi-paid-25-million-to-delete-the-only-test-of-ai-demand-at-its-texas-campus language: en keywords: "Data Centers, Debt, Financing, AI Infrastructure, Power" --- # Fermi paid $25 million to delete the only test of AI demand at its Texas campus > An amendment filed on October 16 erases the 400-megawatt lease covenant on Fermi's turbine loan and defers about $56 million of principal. The demand question now rests on two dates: the TensorWave lease close on October 31 and the construction-start notice Fermi owes its ground landlord by December 31. [Fermi](https://theinference.org/markets/companies/fermi-inc) (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](https://www.sec.gov/Archives/edgar/data/2071778/000121390026109980/0001213900-26-109980-index.htm) 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 [2][3]. 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](https://www.sec.gov/Archives/edgar/data/2071778/000121390026014270/ea027627401ex99-1_fermi.htm), a loan secured by equipment bought for the project, and MUFG held it alone [2][3]. 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]. *Chart: **A $25 million fee defers about $56 million of principal through Q2 2027** Bars showing principal payments Fermi estimates the amendment eliminates: $22M in Q4 2026, $19M in Q1 2027 and $15M in Q2 2027, each a company estimate, with a reference line at the $25 million amendment fee.* *Required principal Fermi estimates the amendment eliminates, by quarter, in USD millions; the 8-K says 'approximately' and 'the Company believes'. The reference line marks the $25 million fee paid to lenders. Source: Fermi 8-K, October 16, 2026. [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](https://theinference.org/markets/companies/amd)'s Instinct GPUs, [signed the only lease so far, in August](https://www.jsonline.com/press-release/story/225403/fermi-announces-binding-lease-agreement-with-tensorwave/), 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](https://www.azcentral.com/press-release/story/126847/fermi-and-tensorwave-agree-to-extend-closing-date-to-october-31-2026/), and the conditions include project-level financing [5]. Even fully effective, the lease left the deleted test about 178 megawatts short [1][2]. ## AMD's guarantee starts only when the rent does [AMD's backing, announced on October 13](https://finance.yahoo.com/technology/ai/articles/fermi-soars-16-amd-backs-155724371.html), 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](https://finance.yahoo.com/technology/articles/fermi-details-6-5-billion-180452764.html) about its ability to keep operating [2][7]. The demand itself is real: a signed 15-year lease and a chipmaker's guarantee are evidence that AI builders want this power [4][6]. What Fermi deleted today was the lenders' way of checking whether it arrives at Matador on time [1]. *Chart: **Cash drained into Matador as debt stacked up, with no revenue yet** Line chart of Fermi's quarter-end cash and total debt from Q3 2025 to Q2 2026: cash peaks near $408.5 million then falls to $91.7 million while debt climbs to $576.4 million.* *Quarter-end cash and total debt, in USD millions, from Fermi's SEC filings; Fermi reported no revenue in any quarter shown. [8]* 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](https://financefeeds.com/fermi-tensorwave-lease-closing-october-31-deadlines/), 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]. ## Takeaway Fermi's lenders no longer have a 400-megawatt demand test to check before the turbine loan matures, and the risk now rides on the October 31 TensorWave close and the December 31 construction notice. ## Sources 1. [Fermi Inc. Form 8-K, Item 8.01: Limited Waiver and Amendment No. 1 to Equipment Supply Loan Financing Agreement, 16 October 2026](https://www.sec.gov/Archives/edgar/data/2071778/000121390026109980/0001213900-26-109980-index.htm) 2. [FinanceFeeds, "Fermi Delays $6.5B TensorWave Lease Close to Oct. 31", 23 September 2026](https://financefeeds.com/fermi-tensorwave-lease-closing-october-31-deadlines/) 3. [Fermi Inc. press release (8-K Exhibit 99.1): "$500 Million Equipment Loan" turbine warehouse facility with MUFG, 10 February 2026](https://www.sec.gov/Archives/edgar/data/2071778/000121390026014270/ea027627401ex99-1_fermi.htm) 4. [Fermi Inc. press release via Milwaukee Journal Sentinel, "Fermi Announces Binding Lease Agreement with TensorWave", 10 August 2026](https://www.jsonline.com/press-release/story/225403/fermi-announces-binding-lease-agreement-with-tensorwave/) 5. [Fermi Inc. press release via AZCentral, "Fermi and TensorWave Agree to Extend Closing Date to October 31, 2026", 22 September 2026](https://www.azcentral.com/press-release/story/126847/fermi-and-tensorwave-agree-to-extend-closing-date-to-october-31-2026/) 6. [Yahoo Finance, "Fermi Soars 16% as AMD Backs Its 222 MW Texas AI Lease", 13 October 2026](https://finance.yahoo.com/technology/ai/articles/fermi-soars-16-amd-backs-155724371.html) 7. [Yahoo Finance / Blockspace, "Fermi details $6.5 billion, 15-year TensorWave lease for 222 MW at Project Matador", 15 October 2026](https://finance.yahoo.com/technology/articles/fermi-details-6-5-billion-180452764.html) 8. [Fermi Inc. quarterly figures (cash, debt, revenue) from its SEC filings, retrieved 16 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0002071778) --- Fermi paid $25 million to delete the only test of AI demand at its Texas campus — The Inference. Canonical: https://theinference.org/article/fermi-paid-25-million-to-delete-the-only-test-of-ai-demand-at-its-texas-campus