Fermi Announces 2.6 GW Texas AI Campus Power Agreement
Fermi announced on August 11 a framework agreement under which Hillcore Energy Capital would finance, build, own, and operate a 2.6 GW power complex at Project Matador in Carson County, Texas. Fermi's release describes a BOOT arrangement centered on roughly 2.5 GW of gas generation plus 100 MW of solar and battery storage. Seeking Alpha reported Fermi shares rose 4.9% in post-market trading after the announcement.
Fermi announced a framework agreement with Hillcore Energy Capital for a 2.6 GW power complex at its Project Matador AI campus in Carson County, Texas. Under the proposed Build-Own-Operate-Transfer, or BOOT, structure, Hillcore would finance, build, own, and operate the facility, according to Fermi's August 11 press release.
The agreement covers the proposed Hillcore Power Center, which Fermi describes as approximately 2.5 GW of phased natural gas-fired generation, alongside approximately 100 MW of solar generation and battery energy storage. Fermi stated that construction of an initial approximately 350 MW power block would begin after definitive agreements are executed, with first power targeted within 24 months of a notice to proceed.
Seeking Alpha reported that Fermi shares rose 4.9% in post-market trading following the announcement.
Commercial structure and capacity target
Fermi's release states that Hillcore and its partners would fund and own the facility on their balance sheets, rather than requiring upfront capital expenditure from Fermi. The company also stated that it would purchase power as customer leases are signed, with terms matched to those leases and fuel costs passed through. Under the described arrangement, construction, operating, and performance risk would sit with Hillcore.
Fermi said it would have an option to acquire the facility after 10 years at fair market value. The company described the parallel buildout of the Hillcore Power Center and its main-campus generation program as designed to bring Project Matador to approximately 4.8 GW of on-site power over roughly 30 months.
Implications for AI infrastructure
The proposed buildout illustrates the scale of power infrastructure contemplated for large AI data center developments. Natural-gas generation can provide dispatchable capacity for high-load AI facilities, while solar and battery assets can complement that generation. The final timeline, however, remains contingent on definitive agreements and the subsequent notice to proceed, according to Fermi's release.
Key Points
- 1Fermi's framework agreement adds a proposed 2.6 GW power complex, materially expanding reported on-site capacity for Project Matador.
- 2The BOOT structure places proposed construction and operating responsibilities with Hillcore, while Fermi described lease-linked power purchases and no upfront capital outlay.
- 3The framework agreement is not yet an operational capacity addition, since construction depends on definitive agreements and a notice to proceed.
Scoring Rationale
The proposed 2.6 GW facility is a notable infrastructure development for a hyperscale AI campus. It is a framework agreement rather than an operational capacity addition, and key milestones remain subject to definitive agreements and construction.
Sources
Public references used for this report.
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