The Texas Tech University (TTU) System and Fermi America announced an 11 GW data center powered by a mix of natural gas, utility grid power, solar, wind and nuclear energy. The newly founded power company is building one of the largest behind-the-meter advanced energy and artificial intelligence campuses in the U.S., covering about 5,800 acres in the Texas Panhandle.
Fermi was actively pitching the site to hyperscale developers and has likely secured multiple buyers, given the announcement of the project. This adoption would meaningfully expand the buyer’s fleet, positioning alongside today’s top hyperscalers.
Data center construction is estimated at $37 million/MW, and our analysis suggests the four planned AP1000 reactors would require an investment of roughly $7.8 million/MW. With total data center capacity expected to hit 82,000 MW by 2035 (Figure 1) and power supply still a major hurdle, Fermi’s diversified energy strategy may signal a new approach for securing power.
Supply chain backlog and other constraints have driven up the cost of new gas buildout, triggering a surge in M&A activity. Fermi has, so far, navigated this challenge effectively, acquiring over 600 MW of natural gas generation and avoiding the multiyear lead times associated with original equipment manufacturers. As it scales, it will be interesting to see if it can continue avoiding bottlenecks in the market.
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