Rick Perry's Fermi REIT Seeks $13.16B Valuation Amid AI Boom: Reuters

Fermi, a data center REIT co-founded by former U.S. Energy Secretary Rick Perry, is targeting a valuation of up to $13.16 billion in its upcoming U.S. IPO, according to Reuters. The Amarillo, Texas-based company plans to raise up to $550 million by offering 25 million shares priced between $18 and $22. This IPO is driven by substantial investment in data centers spurred by the growth of artificial intelligence. Founded in January 2025, Fermi is a development-stage company focused on constructing a large-scale energy and data complex. Its flagship project, "Project Matador," situated on a 5,236-acre site in Texas, aims to supply up to 11 gigawatts of power to data centers by 2038, utilizing a mix of nuclear, natural gas, and solar energy. Fermi projects one gigawatt of capacity will be available by the end of 2026 to attract potential tenants. However, the company forecasts no revenue generation within the next 12 months and has reported a loss of $6.4 million since its inception through June 30. Market analysts, including Matt Kennedy, a senior strategist at Renaissance Capital, view the proposed valuation as ambitious for a company in its developmental stage. While acknowledging that "AI is arguably the investment story of a lifetime," Kennedy emphasized that Fermi's success is contingent upon securing key contracts. The IPO is intended to position Fermi alongside other AI-centric firms, such as data center operators CoreWeave and WhiteFiber, which have recently entered the public markets. Fermi's IPO signifies a considerable investment in the anticipated future demand for AI-driven data centers. However, the absence of current revenue and reliance on future contracts introduces a significant level of risk for investors. The success of "Project Matador" will be pivotal in substantiating the company's valuation and attracting critical tenants within the highly competitive data center market.