Fermi's $6.5 Billion TensorWave Data Centre Lease Misses Its October 31 Closing Deadline

The lease is between Fermi subsidiary Fermi Campus 1 LLC and TensorWave TEX1, LLC. It covers 222MW of total facility power at Fermi's Project Matador campus over an initial 15-year term, and Fermi has said it expects about $6.5 billion in revenue over that term. The two companies signed the agreement in August.

In its November 3 statement, Fermi listed the conditions still to be met: signing and delivering the related work letters and guaranties, finalising operations schedules and a service-level agreement, obtaining board approvals, and securing enough project-level financing to pay for construction of the leased premises. The company said neither party has used any right to terminate and both are still working to complete the deal.

"Both Fermi and TensorWave remain committed to this lease," Chief Executive Lee McIntire said, adding that the company is "continuing to work through the remaining conditions prior to close." Fermi said it would give more detail on its earnings call next week, or earlier if appropriate. The statement did not set a new closing date.

Fermi shares fell 3.4% in pre-market trading after the announcement, according to GuruFocus.

A Second Missed Date

This is the second time the closing has slipped. On September 22, the companies amended the agreement to move the closing date from September 30 to October 31 and left all other terms unchanged. Fermi said then that the extra time was needed to finalise a guaranty of certain lease obligations with an investment-grade counterparty. "Our remaining work is to finalize the lease guaranty with our counterparty," McIntire said at the time, calling the discussions "active, constructive and progressing."

The guaranty matters to investors because it would cover TensorWave's payments if the tenant could not meet its obligations over the 15 years. FinanceFeeds noted in September that no guarantor had been publicly named. It argued that until one is in place, the $6.5 billion should be treated as contingent rather than contracted revenue.

TensorWave runs its AI cloud only on AMD Instinct GPUs. Its backers include Magnetar, AMD Ventures, Maverick Silicon, Nexus Venture Partners and Western Frontier. Fermi plans for Project Matador to combine natural gas, nuclear, solar and battery storage to supply gigawatt-scale power for hyperscale computing. GuruFocus says the company has not yet reported any revenue.

Shareholder Pressure

The delays have come with scrutiny from inside the company. FinanceFeeds reported that co-founder Toby Neugebauer, the largest shareholder, filed a proposal calling for an independent review of Fermi's extraordinary transactions. Neugebauer and related entities hold about 22% of the stock, according to the report. The proposal was set for a vote at the October 30 annual meeting, the day before the closing deadline.

Why It Matters

For investors in AI infrastructure, the deal shows a gap that is becoming familiar. Data centre developers can announce large leases to fast-growing GPU cloud tenants, but those leases bring revenue only once credit support and construction financing are in place. A signed lease that waits on a guarantor and on project debt carries more risk than the headline value suggests, especially for a developer with no revenue. Fermi's earnings call next week is the next chance to learn whether a guarantor has been found and when the lease might close.