Fermi Shares Sink 20% as CEO Exit Clouds AI Data Center Ambitions

Shares of Fermi, the high-profile data center developer that rode the AI infrastructure boom to a $15 billion IPO last year, tumbled by 20% in extended trading on Friday after the abrupt departure of its CEO.

According to an SEC filing on Friday, Fermi CEO Toby Neugebauer abruptly stepped down on April 17, with the board installing an interim “Office of the CEO” composed of Chief Operating Officer Jacobo Ortiz and board observer Anna Bofa. Fermi added that it will begin a formal search for a permanent replacement and expects to provide further details on April 20.

Fermi’s trajectory is now being closely watched as a test case for the broader AI infrastructure buildout. The sector has attracted tens of billions of dollars in financing tied to expectations of surging demand for compute power, but projects of this scale face mounting challenges ranging from supply chain constraints to power availability and customer concentration.

Neugebauer’s sudden exit comes with little warning to investors. Just a day earlier, Neugebauer had spoken with Axios, acknowledging project setbacks but giving no indication he would step down. His departure triggered a sharp market reaction, with shares falling about 20% in after-hours trading on Friday, extending a broader slide since its IPO. Fermi raised $682 million in October, selling 32.5 million shares at $21 per share. It surged to over $30 on the market debut but has since then plunged by 70%, closing Friday at $6.55.

Fermi’s leadership shake-up lands at a critical moment for a company that has become a bellwether for investor appetite toward large-scale AI infrastructure bets. Founded by former U.S. Energy Secretary and Texas governor Rick Perry, Fermi went public less than a year after its formation with no revenue in an unusual move even during a period of intense enthusiasm for AI-linked assets.

The Amarillo, Texas-based firm has pitched an ambitious vision centered on “Project Matador,” a sprawling private grid and data campus expected to combine nuclear, natural gas and solar power to support AI computing. At full scale, the project has been marketed as reaching up to 11 gigawatts of capacity—placing it among the largest proposed data center developments globally.

But execution risks have increasingly come into focus.

Neugebauer himself acknowledged in the Axios interview that the company underestimated key bottlenecks, particularly around cooling systems—critical infrastructure typically designed in coordination with anchor tenants. Fermi has yet to publicly confirm a major hyperscale customer, a prerequisite widely viewed by analysts and lenders as necessary to unlock project financing and advance construction.

The company has also revised expectations for its initial buildout. While it previously targeted bringing roughly 1.1 gigawatts online by the end of 2026, recent disclosures indicate that timeline is no longer achievable. Independent analysis cited by Axios suggests the first operations may not begin until 2027 even under optimistic assumptions.