Fermi Inc. (NASDAQ:FRMI) shares surged 13.2% in pre-market trading on Tuesday after the company announced a credit support agreement with Advanced Micro Devices (NASDAQ:AMD) for the first phase of its Project Matador artificial intelligence infrastructure development in Texas.
The agreement supports a customer lease covering 222 megawatts (MW) of gross power capacity at the Carson County facility and represents a step towards securing financing for the initial development phase.
The companies also signed a framework agreement covering potential future expansion of up to 650 MW of gross power capacity.
Fermi is developing Project Matador as a large-scale energy and AI computing infrastructure site in the Texas Panhandle, with more than $1.5 billion invested in the project to date.
The credit support agreement with AMD relates to Fermi’s first customer lease, which was originally announced on 10 August 2026.
The lease covers the first phase of Project Matador, designed to deliver 222 MW of gross power capacity.
The agreement provides additional credit support for the lease arrangements and represents a milestone in Fermi’s efforts to secure project financing.
Large-scale AI infrastructure developments require substantial investment in power generation, electrical infrastructure and facilities capable of supporting high-density computing equipment.
Credit support arrangements can help strengthen the financial structure underpinning such projects and provide additional assurances to lenders and other financing participants.
However, the announcement does not confirm that financing for the first phase has been completed.
The financial terms of AMD’s credit support commitment were not disclosed in the information provided.
Alongside the credit support agreement, Fermi and AMD entered into a framework agreement covering potential expansion of Project Matador.
The framework relates to future phases that could provide up to 650 MW of gross power capacity.
The agreement establishes a basis for further collaboration as the project develops, although the proposed expansion remains subject to future arrangements.
Fermi Chief Executive Officer Lee McIntire highlighted the significance of the partnership.
“We are thrilled to partner with AMD as we advance development at Project Matador,” McIntire said.
“Our strategic partnership establishes a framework for phases two and three.”
The framework agreement provides a potential route for expanding the development beyond its initial 222 MW phase.
However, the announcement does not establish a definitive construction timetable or confirm binding customer commitments for the additional capacity.
AMD’s involvement in Project Matador reflects the infrastructure requirements associated with the development and deployment of advanced artificial intelligence technologies.
AI computing facilities require substantial electrical capacity to operate processors, networking equipment and cooling systems.
The availability of reliable power infrastructure is therefore an important consideration for companies developing large-scale AI computing operations.
Mathew Hein, Senior Vice President and Chief Strategy Officer of Corporate Development at AMD, commented on the agreement.
“Our collaboration with Fermi is an important step in expanding the infrastructure capacity needed to bring next-generation AI solutions to market,” Hein said.
The comments highlight the role of power and data centre infrastructure in supporting the expansion of AI computing capabilities.
The agreement does not specify the computing hardware that will be deployed at Project Matador or establish a timetable for AMD-related equipment installations.
Fermi said it has invested more than $1.5 billion in Project Matador to date.
The development is located in Carson County in the Texas Panhandle and is designed to support large-scale AI computing facilities through dedicated energy infrastructure.
A central feature of the project is its planned use of behind-the-meter power delivered through a private grid.
Behind-the-meter arrangements allow electricity to be supplied directly to facilities through infrastructure located on the customer’s side of the utility meter, rather than relying exclusively on conventional electricity purchases through the public grid.
For high-demand computing operations, dedicated power infrastructure can form part of a broader strategy to manage electricity availability and supply requirements.
Project Matador is intended to combine substantial power capacity with infrastructure capable of supporting AI-related computing demand.
The company has not provided a detailed breakdown of its $1.5 billion investment in the supplied announcement.
Fermi has outlined plans for Project Matador to reach approximately 17 gigawatts (GW) of capacity over time.
The figure represents the project’s potential long-term scale rather than capacity already completed or contractually committed.
Development of the broader site remains dependent on securing binding customer agreements.
Fermi said capital deployment will be aligned with commercial commitments, indicating that investment in additional phases is intended to follow contracted demand.
The initial 222 MW phase and the framework for up to 650 MW of further capacity represent early stages within the company’s larger development plans.
The proposed 17 GW scale would require substantial additional infrastructure investment and customer commitments.
No timetable was provided for reaching the full proposed capacity.
Fermi shares advanced 13.2% in pre-market trading following the announcement of the AMD agreements.
The increase came as investors assessed the implications of the credit support arrangement for the project’s initial lease and financing plans.
The involvement of AMD provides an additional commercial relationship for Fermi as it develops its energy and AI infrastructure business.
The framework agreement also establishes the possibility of collaboration on future phases of Project Matador.
However, the additional capacity remains prospective, and the first-phase credit support agreement does not itself represent completed project financing.
The distinction between announced agreements, financing milestones and fully committed construction phases remains important when evaluating the development.
Fermi’s agreement with AMD represents a further step in the development of Project Matador, providing credit support for a 222 MW first-phase lease and a framework for potential expansion of up to 650 MW.
The company has already invested more than $1.5 billion in the Texas project and has outlined a longer-term capacity target of approximately 17 GW.
For investors, the next developments will include progress towards securing project financing, the execution of binding customer agreements and the timing of additional construction phases.
The 13.2% pre-market increase in Fermi shares reflects a positive initial market reaction to the AMD agreements, although the project’s future scale and capital requirements will depend on commercial commitments and financing arrangements.
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