Rick Perry-backed Fermi REIT raises $682 million in U.S. IPO amid AI data-center boom

Fermi, a data center REIT co-founded by Rick Perry, successfully raised $682.5 million in its U.S. IPO, selling 32.5 million shares at $21 each and valuing the company at $12.46 billion. The offering, which saw strong investor demand and an increased share count, highlights significant market appetite for AI infrastructure, despite Fermi being in early development with no revenue projected for the next 12 months and a reported $6.4 million loss. The company plans a dual listing on Nasdaq and LSE, focusing on building a large-scale AI data center campus in Texas powered by a mix of nuclear, natural gas, and solar energy for hyperscale tenants.

Analysis

Fermi's successful initial public offering, raising $682.5 million at a $12.46 billion valuation, highlights intense investor appetite for pure-play AI infrastructure assets. The offering's upsize from an initial 25 million to 32.5 million shares confirms strong demand, a sentiment echoed by the positive market performance of sector peers CoreWeave and WhiteFiber. The company's strategy hinges on developing a massive AI data center campus in Texas with a unique energy mix including nuclear, natural gas, and solar, targeting an ambitious 11 GW of power capacity by 2038. However, the investment proposition is entirely forward-looking and carries significant execution risk. Fermi is a pre-revenue company, reported a $6.4 million loss since inception, and does not project its first 1 GW of power to be online until late 2026, making its current valuation a bet on its long-term development plan and the secular growth of AI.

Key Decisions for Investors

• Investors should view Fermi as a high-risk, long-term speculative investment, given its pre-revenue status and a valuation entirely dependent on the successful execution of its ambitious AI infrastructure and energy strategy.
• It is critical to closely monitor development milestones, particularly the progress toward delivering the first 1 GW of power by late 2026 and the securing of initial hyperscale tenant contracts, as these are key de-risking events.
• Given the speculative nature of the investment, position sizing should be conservative, while also tracking the performance of peers like CoreWeave (CRWV.O) and WhiteFiber (WYFI.O) as a barometer for ongoing market sentiment in the AI data center sector.