(Bloomberg) — US efforts to develop artificial intelligence systems and the nuclear-energy infrastructure needed to power them are comparable to the World War II initiative to build the first atomic bomb, according to Fermi Inc., a power-plant developer planning a massive data-center campus in Texas.
“Make no mistake, America is at war,” Fermi wrote in a letter to shareholders Monday as it reported its first quarterly earnings since the company’s initial public offering six weeks ago.
Former US energy secretary Rick Perry during the company’s IPO at the Nasdaq MarketSite in New York on Oct. 1.Photographer: Victor J. Blue/Bloomberg
The rhetoric from Fermi, who’s co-founders include former US Energy Secretary Rick Perry, underscores the bold ambitions surrounding AI and the scale of the challenge in powering the data centers being planned or built across the US. Fermi’s Matador project in the Texas Panhandle is envisaged as eventually comprising four large nuclear reactors, although they won’t be complete until the 2030s, and the company is currently working to install natural gas turbines at the site.
The letter also focuses on the race between China and the US to develop AI technology. The US is lagging behind, according to Fermi, because China is developing 33 nuclear reactors and the US has no commercial atomic projects under construction.
“We are humbled to partner with you on the Manhattan Project of our generation,” Fermi said. “Together, we are answering the call to defend our country and Western Civilization against the national security threat of our time.”
Fermi shares slumped as much as 13% on Tuesday.
The company expects to have 1.1 gigawatts of gas capacity in service by the end of 2026, and will start generating revenue from its first data-center client. For every gigawatt of electricity the company installs, Fermi expects to receive $1.5 billion of annual revenue and $1 billion of net income, Chief Financial Officer Miles Everson said during a conference call Tuesday.
The shareholder letter “reads more like a Francis Ford Coppola script (we had images of the helicopter scene in ‘Apocalypse Now‘ running through our heads) than a mid-cap earnings update,” Timm Schneider, an energy analyst and founder of The Schneider Capital Group, said in a note.
Fermi, which has no revenue, posted a net loss of $353.2 million for the year through Sept. 30, and has cash and cash equivalents of $183 million. The company has a market capitalization of about $15 billion.
(Updates with comments from CFO in sixth paragraph.)
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