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A hyperscaler agreed to prepay US$200 million for Texas power that already has its permit. China wants to build the turbines for the next one.

Fermi America says an unnamed investment-grade hyperscaler will take an initial 600 MW at its Amarillo campus from 2027, with a US$200 million prepayment agreed and no signed lease yet. Bloomberg reported the same day that Beijing is pushing its turbine makers to chase data center orders abroad, citing waits of more than five years from major global suppliers.

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A power plant lit up at night, with tall exhaust stacks, steel walkways and pipe racks, and a full moon in the sky.
Photo: American Public Power Association · Unsplash License

Image: a power plant in Santa Clara, California, published on Unsplash by the American Public Power Association and listed under Silicon Valley Power, Unsplash License. It is not Fermi’s Amarillo campus, and it does not show the turbines in this story.

On Thursday, 12 November, Fermi America announced agreements with an undisclosed investment-grade hyperscaler for an initial 600 MW at Project Matador, its campus in Amarillo, Texas, beginning in 2027 [Fermi, Q3 2026 results release, 12 Nov 2026]. The customer has agreed to a US$200 million prepayment and a US$15 million early construction and site development agreement. A definitive long-term lease is still being negotiated, and the customer’s name is confidential [same source].

Chief executive Lee McIntire gave the reason in one line: “Hyperscalers want sites that are ready with permitted power” [same source]. On the same day, Bloomberg reported that China’s National Energy Administration (NEA) is pushing domestic gas turbine makers to target data center projects overseas, saying customers face waits of more than five years from the major global suppliers [Bloomberg via Energy Connects, 12 Nov 2026].

What’s happening

  • The deal. Besides the prepayment, Fermi says a US$90 million structural steel and building materials purchase agreement is being finalized, under which the customer would use long-lead materials Fermi secured in advance [Fermi release, 12 Nov 2026]. On the earnings call, management said the agreement requires the US$200 million wire to arrive by 13 November, that the goal is to start mobilizing on site by 1 December, and that initial power is targeted for late in the second quarter or early in the third quarter of 2027 [Fermi Q3 2026 earnings call transcript, The Motley Fool, 12 Nov 2026].
  • The lost tenant. The data center lease with the neocloud TensorWave, signed in August 2026, has been terminated, together with the related AMD credit support agreement [Fermi release, 12 Nov 2026]. McIntire called it “a complex turnkey lease with a neo-cloud involving multiple parties”; the company declined to give details of the negotiations [Motley Fool transcript, 12 Nov 2026].
  • The power. “Behind the meter on our own grid, we have more than 2 gigawatts of generation equipment secured,” McIntire said, adding that “we already have turbines on-site” [Motley Fool transcript, 12 Nov 2026]. On 25 February 2026 Fermi announced that the Texas Commission on Environmental Quality (TCEQ) had granted final approval of a clean air permit for 6 GW of natural gas generation at the campus, and said it was positioned to move six Siemens Energy SGT-800 gas turbines from the Port of Houston to Amarillo [Fermi America via PR Newswire, 25 Feb 2026].
  • The balance sheet. Fermi is pre-revenue. It ended September with US$315.5 million in cash and restricted cash and US$958.4 million of debt, net of discounts and issuance costs, after investing US$759.5 million in property, plant and equipment in the first nine months. It lost US$141.6 million in the third quarter [Fermi release, 12 Nov 2026]. The finance chief said funding is “transitioning from Fermi corporate cash to customer prepayments” and project-level debt and equity [Motley Fool transcript, 12 Nov 2026].

By desk arithmetic, the prepayment is equal to about 63 percent of Fermi’s 30 September cash and restricted cash, and works out to about US$333,000 per megawatt of the initial 600 MW. Neither figure is reported by Fermi; the prepayment terms, including what it buys and whether it is refundable, were not disclosed in the release.

US angle

McIntire described the market his customer is shopping in: “in Texas, ERCOT, for example, froze new large load connections,” and “Texas for example, paused new air permits before the election. And then the elections last week added more uncertainty” [Motley Fool transcript, 12 Nov 2026]. Management said the site already holds “all of the permitting so far that is required” for the customer’s construction [same source].

That is the asset being priced. The desk’s reading: in a state where both the grid queue and new air permits have been frozen, a site that already holds its air permit and has turbines on the ground is scarce, and a hyperscaler is willing to put money down before a lease is signed. The customer also carries part of the build itself: McIntire said it is “building its own data centers under a project manager” [same source].

China angle

Wang Yunbo, deputy director of the NEA’s market regulation department, told the People’s Daily that the turbine shortage is “both an opportunity and a challenge” for China’s industry, and that capacity is increasingly tight as the power gap for data centers widens [Bloomberg via Energy Connects, 12 Nov 2026]. The market is dominated by GE Vernova, Siemens and Mitsubishi Heavy Industries. A policy paper released earlier in November sets a goal of an independently controlled Chinese turbine supply chain by 2030, and Beijing is targeting bottlenecks from turbine blades to high-temperature materials [same source].

The exports have started. Dongfang Electric shipped a unit to Kazakhstan in August and this month won an order for 2.1 GW of turbines from a Canadian data center developer that Bloomberg does not name. Shanghai Electric won a contract to supply equipment to Malaysia’s Sarawak Energy [same source]. Bloomberg cites BloombergNEF’s forecast that data center electricity demand will quadruple to 2,354 terawatt-hours by 2035, or 7 percent of global power consumption [same source].

Brazil angle

Cenário Energia reported on 12 November that Hitachi Energy had signed its first HMAX Energy service contract in Brazil with BCR-i Brasil, using AI and data analysis to monitor a 560 MVA substation that serves a data center complex in São Paulo state and to anticipate equipment failures [Cenário Energia, 12 Nov 2026]. “Data centers are at the center of the era of artificial intelligence and operate with an expectation of 100 percent availability,” said Fernanda Alves, Hitachi Energy’s service hub manager for Latin America [same source]. The article cites projections that load on Brazil’s national grid (SIN) could reach 98.8 GW by 2030, growing about 4 percent a year [same source].

What it means

The desk’s reading of Fermi’s announcement: secured generation and a permit in hand are now worth cash up front, before a lease. That favors anyone already holding equipment and permits, and penalizes projects still waiting for either, in Texas or anywhere a state can pause approvals.

China’s move targets the other side of that trade. If waits for the major global suppliers run past five years, as the NEA says, Chinese machines become the alternative for developers who cannot wait, and Dongfang’s 2.1 GW Canadian order shows some are already buying.

For Brazil, the desk reads the contrast both ways: a grid-connected campus with a 560 MVA substation does not need its own turbine slot, but it depends on the national grid.

What to watch

  1. 13 November and 1 December. Whether the US$200 million arrives by the deadline management gave, and whether on-site mobilization starts by 1 December. A slip on either is the first test of the deal.
  2. The definitive lease. Fermi has not signed it and has not named the customer. A signed lease, with term and tenant, would turn a prepayment into contracted revenue; until then the 600 MW is an agreement in progress.
  3. Chinese turbines in North America. Whether the Canadian developer behind Dongfang’s 2.1 GW order is named, and whether any US data center project places a Chinese turbine order. Either would show how far the five-year wait is pushing buyers.

Sources

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