Fermi CEO and CFO abruptly exit AI nuclear power firm, shares plunge 22% amid Project Matador struggles

CEO and CFO suddenly depart AI nuclear power upstart Fermi | TechCrunch

Fermi co-founder and CEO Toby Neugebauer and CFO Miles Everson have suddenly departed the AI nuclear power firm, sending shares down 22% on Monday. The company said Neugebauer has stepped down as chairman, although he still remains on the board. Lead Independent Board Director Marius Haas has stepped into the role of chairman, the company said Monday. Everson has been elected as a board director as a result of the exercise of director designation rights held by the Melissa A. Neugebauer 2020 Trust. Fermi, which was co-founded by former U.S. Energy Secretary Rick Perry, is developing an AI campus in Amarillo, Texas, that will eventually use nuclear reactors to power data centers. That campus, known as Project Matador, has struggled in recent months, including friction with a key customer, Bloomberg reported. The company couched the departures, along with other plans including a corporate headquarters in Dallas, as Fermi 2.0 in an effort to signal to investors that it was still making progress on its project.

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The struggles continue for Fermi America's 17 GW bit barn ambitions It's been a weekend filled with dizzying changes in the boardroom at datacenter wannabe Fermi America as it hopes eventually to expand its West Texas campus to about 17 gigawatts of behind-the-meter generation capacity. The company's CEO and co-founder Toby Neugebauer quit suddenly on Friday. Then on Sunday CFO Miles Everson resigned and moved into a board seat, while Neugebauer remained a director, as a group of new leaders searches for their replacements. Fermi has struggled to get power equipment and to find a hyperscaler customer as an anchor tenant for its massive datacenter. It had reportedly found a tenant in November. However, during the company's March earnings call, it stated it had not yet won a renter for any of its planned buildout. Analysts at Stifel were among those who took part in a call with Fermi's new leadership over the weekend that sought to soothe jittery investors. They saw an upside to Neugebauer's departure, according to a research note published Sunday. "While the CEO's departure clearly creates concern, a conversation with management indicated: 1) there is nothing nefarious behind Mr. Neugebauer's departure and 2) FRMI has seen an acceleration in customer conversations since the announcement of the CEO departure on Friday afternoon," Stifel wrote. "In our view, this indicates there was friction between customers and Mr. Neugebauer and negotiation could be simpler going forward." Fermi offered no rationale for the change, but Neugebauer is facing multiple lawsuits, with one accusing him of fraud, after his previous venture, an anti-woke lending app, collapsed into bankruptcy. Neugebauer has in turn sued several of his previous investors under RICO statutes. Among them are conservative personality and Ohio gubernatorial candidate Vivek Ramaswamy, PayPal and Palantir cofounder Peter Thiel, as well as Thiel's venture investment firm, Founders Fund. According to a Politico story, Neugebauer - who previously lived in a scale recreation of the White House in Dallas - recently got into a spat with current US commerce secretary Howard Lutnick at Nvidia's GTC conference, where he reportedly accused Lutnick of blocking some portion of Project Matador, also known as The President Donald J. Trump Advanced Energy and Intelligence Campus. In SEC filings last year, Fermi outlined plans for four Westinghouse nuclear reactors, alongside solar arrays and natural gas turbines, to deliver up to 11 gigawatts of behind-the-meter power for AI infrastructure, with the campus potentially expanding to about 17 GW if it secures additional land and permits. The 5,263-acre site where most of the construction is happening is owned by the Texas Tech University System and sits beside the Panhandle-Hugoton Gas Field, which is one of the largest known natural gas fields in the US. Project Matador also abuts Pantex, where for the last 70 years the US Department of Energy has built and now disassembles nuclear weapons and stores plutonium, according to the Pantex website. Texas Tech Chancellor Brandon Creighton offered supportive remarks adding that the university and Fermi America are in discussions to extend certain lease milestones. "Project Matador has the potential to deliver generational impact -- not just for (Texas Tech), but for national security, American energy independence, and the future of advanced research and industry in West Texas," Creighton said in a statement. The corporate changes announced Monday were branded as "Fermi 2.0." Lead Independent Board Director Marius Haas was named chairman of the board. A veteran technology executive with previous leadership roles at Compaq, HPE, KKR and Dell, Haas will also oversee the search for Neugebauer's replacement. For now, the company has created the "Office of the CEO" -- a dual-leadership structure led by newly appointed Co-Presidents Jacobo Ortiz Blanes, the former COO, and Anna Bofa, a former board advisor with a background at Google, Dropbox, Pinterest, and Meta. Haas made it clear the company has no plans to give up on Project Matador - which could expand to 17 gigawatts and 7,200 acres - as it looks for a new CEO. A permanent CEO search is underway, with a board committee of Haas, Lee McIntire, and Cordel Robbin-Coker overseeing the process. The company has also engaged executive search firm Heidrick & Struggles to help. In addition to searching for new personnel, the company is establishing a new headquarters in Dallas and building out an office in Amarillo near the Project Matador site, while adding two additional board seats. One seat was claimed by Miles Everson, who resigned from the CFO role to take the board seat. The company says it is negotiating with a candidate to be interim CFO. New to the board is Jeffrey S. Stein, an experienced corporate turnaround advisor and co-founder of Breakpoint Advisory Partners, who has previously been on the boards of Sunnova Energy International Inc., Vertex Energy, Inc., and Rite Aid Corporation, among others. Fermi's shares closed down 15 percent Monday, leaving the stock more than 80 percent below its October high of $29.08. ®

AI Nuclear Power Developer Fermi Slumps After Abrupt Exit of CEO

Fermi has created an "interim office of the CEO" and is searching for Neugebauer's replacement, with some analysts viewing the management change as a potential positive development for the company. Fermi Inc., a developer of nuclear power for AI data centers, slumped after the sudden departure of co-founder and Chief Executive Officer Toby Neugebauer along with the company's chief financial officer. The company is developing a massive AI campus in Texas that it says will eventually be powered by four nuclear reactors. But Fermi has faced challenges in recent months including the loss of a key anchor tenant for the site. The change at the top of the company "indicates that there was friction between customers and Mr. Neugebauer, and negotiations could be simpler going forward," Stifel Nicolaus & Co. analyst Stephen Gengaro said in a note. The exit of Neugebauer, who led the company through its October initial public offering, was disclosed in a filing late Friday after the close of trading. Fermi held a conference call over the weekend for analysts, during which it said the board had been considering the change in management for at least three months, according to a research note from Evercore ISI. On Monday, Fermi issued a statementBloomberg Terminal revealing that Miles Everson resigned as CFO, and that it's planning a new corporate headquarters in Dallas. Fermi said it has created a "interim office of the CEO," comprising Jacobo Ortiz Blanes and Anna Bofa, both company executives who will now serve as co-presidents, while it searches for Neugebauer's replacement. Neugebauer, a major shareholder in the company, will remain on the board. Everson was elected to the board, Fermi said. The shares fell as much as 23% in pre-market trading Monday. Through Friday's close, they had tumbled 69% since the IPO, giving Fermi a market capitalization of $4.1 billion. Some analysts covering the stock said that despite the negative stock reaction to management overhaul, the change could turn out to be a positive development for the company. "Overall, we view this transition as changing the 'tone at the top' but maintaining the same tenacity and vigor the industry has seen from an operational perspective," Evercore analysts led by Nicholas Amicucci wrote in their note.

Fermi America responds to former executive's sale demand By Investing.com

DALLAS - Fermi Inc. (NASDAQ:FRMI) (LSE:FRMI) said Monday it opposes a call from former executive Toby Neugebauer to initiate an immediate sale of the company, according to a press release statement. The company said it received positive feedback following its announcement of Fermi 2.0 on April 20 from potential tenants, its landlord Texas Tech University System, suppliers, vendors, contractors, and financing sources. Neugebauer, who was removed from his position on April 17 by the board of directors, issued a letter and press release calling for the company's sale. The board said a sale is not in the best interest of the company's momentum on Project Matador and long-term shareholder value creation. The board stated it will review options to maximize shareholder value, including continued execution of its business plan, strategic investments from third parties, joint ventures, or other transactions.The dispute comes as FRMI shares trade at $5.06, down 84% over the past year and 75% in the last six months. According to InvestingPro analysis, the stock appears undervalued at current levels. An InvestingPro Tip notes the company is "quickly burning through cash," with negative free cash flow of $603 million over the last twelve months. Fermi America is developing private electric grids for artificial intelligence applications. The company's Project Matador is planned as a 17 gigawatt campus integrating natural gas, nuclear power, utility grid power, solar power, and battery energy storage. The company was co-founded by former U.S. Energy Secretary Rick Perry and Neugebauer, who was previously co-managing partner of Quantum Energy. In other recent news, Fermi has undergone significant leadership changes, with co-founder Toby Neugebauer stepping down as CEO. This transition is part of a broader strategic restructuring initiative known as "Fermi 2.0," aimed at evolving the company from a startup to a more established operating and governance model. Marius Haas has been appointed as the new Chairman of the Board, taking over leadership responsibilities during this transition. Additionally, CFO Miles Everson has resigned, marking further shifts in the company's executive team. Former CEO Neugebauer has called for an immediate sale of the company, emphasizing the need to maximize shareholder value. Despite these leadership changes, Stifel and Texas Capital Securities have both reiterated their Buy ratings on Fermi, with price targets set at $29.00 and $22.00, respectively. These ratings reflect confidence in the company's strategic direction despite recent executive departures. The restructuring is expected to support ongoing projects, including Project Matador. These developments highlight a period of transformation and uncertainty for Fermi as it navigates its future path. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.