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(Bloomberg) — Fermi Inc. co-founder Toby Neugebauer, who was ousted from his role as chief executive officer late last week, is calling for a sale of the prospective AI power provider.
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The move is the latest in the saga at the company, which is developing a massive AI campus in West Texas. Fermi has been dogged by challenges in recent months, including the loss of an anchor tenant. And the scope of its project — as much as 17 gigawatts of power — has left skeptics wondering if it can meet its ambitious goals.
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Fermi’s shares have fallen by nearly three-quarters since its initial public offering last fall. The stock was down about 2% on Tuesday, after tumbling 18% on Monday.
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In a press release late Monday, Neugebauer said he wants Fermi’s board to begin an immediate process led by an independent investment bank for a sale to a third party. The departing CEO said he was informed by Fermi’s board on Friday that he was being removed without cause.
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Fermi didn’t immediately comment.
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The company’s Project Matador is one of the world’s biggest power projects and would initially be fueled by natural gas. In some ways, it’s become a litmus test for the larger challenges facing the industry. Data centers running artificial intelligence will need huge amounts of electricity, but it’s unclear how quickly infrastructure will be built.
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Some power providers and operators are forecasting enormous growth — just last week the Texas grid published a dramatic projection for demand, implying peak electricity usage would have to quadruple from current levels by 2032. But analysts have said that kind of rapid rise would be nearly impossible to accomplish in practical terms.
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Initial designs for Fermi’s Project Matador site near Amarillo, Texas, called for delivering as much as 11 gigawatts of gas, nuclear and solar power. In March, the company said it secured additional land to expand that to as much as 17 gigawatts — akin to the capacity of 17 nuclear reactors.
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Neugebauer said in the press release that he, his family members and other colleagues who departed Friday own about 40% of the company’s shares, and that he “ultimately cares about making money for all shareholders more than finishing what he and his team started.”
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Fermi’s co-founders also include former US Energy Secretary Rick Perry.
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—With assistance from Naureen S. Malik and Lauren Rosenthal.
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(Updates with additional context and details throughout.)
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