Fermi details $6.5 billion, 15-year TensorWave lease for 222 MW at Project Matador
Fermi (FRMI) announced a 15-year lease with TensorWave for 222 MW at Project Matador, Texas. The deal, valued at $6.5 billion, includes 2.5% annual escalators and renewal options. Fermi will develop and build the facility, with occupancy starting in Q4 2027. Estimated capex ranges from $666 million to $888 million for power and $1.56 billion to $1.87 billion for the data center. The lease is expected to close by October 31, with AMD providing credit support.
How this was made
The 30-second read
Why it matters
The disclosure provides concrete contracted revenue ($6.5B), escalators (2.5% annually), renewal terms, and project-level NOI margin expectations, but the transaction is still not closed and depends on guaranties, an SLA, and adequate project-level financing.
Market read
Traders get a clearer view of contracted AI data-center cash-flow economics for FRMI, but must weigh deal-close and financing conditions as near-term risks.
What to watch
AMD credit support is described as progress toward financing, not a financing close, and the lease has not closed, so credit/SLAs and guaranties could still delay or alter economics.
Background
Fermi is developing Project Matador in Texas and signed a phase-one lease with TensorWave for 222 MW total power capacity and 156 MW critical IT capacity.
Ticker impact
Fermi disclosed TensorWave lease economics for Project Matador, including $6.5B contracted revenue over a 15-year, 222 MW power-capacity term.
Likely supportive bias as investors price in contracted revenue and high NOI margin, tempered by uncertainty around lease closing and AMD credit support timing.
The article provides specific deal structure, revenue, escalators, capex assumptions, and NOI margin, but also states the lease has not closed and financing/guaranty conditions are still outstanding.
Market effects
Adds another datapoint on AI data-center lease structures, including high NOI margin framing and pass-through power charges.
Highlights Texas power and turbine buildout planning for large-scale AI load growth in Carson County.
Reinforces broader AI infrastructure financing and contracting patterns, relevant to data-center REITs and power-equipment supply chains.
Counterpoint
High NOI margin is non-GAAP and not reconciled to operating income yet, so investors may discount the profitability framing until operating results or closer-to-close updates arrive.
Key entities
- companyFermi
Developer disclosing TensorWave lease economics and project capex/NOI assumptions for Project Matador.
- companyTensorWave
Tenant occupying the facility in phases starting in Q4 2027, with expansion rights beyond phase one.
- companyAMD
Provided phase-one credit support via a credit support agreement, with support beginning after construction and rent start.
- companySiemens
Supplies turbines for phase-one power generation (six SGT-800 units) and additional units for phase two.
