Feud between AI power startup Fermi and fired CEO and top shareholder heats up over proposed sale

The struggling Texas company, which went public last year at a nearly $20 billion market cap, aspires to build the largest data center campus in the world, called Project Matador, in the Texas Panhandle, but it has struggled to nail down anchor tenants. Fermi is now advising against recommendations from its fired co-founder and CEO to sell the company.

The company’s market cap has plunged to less than $3.2 billion as of April 21.

The former CEO, Toby Neugebauer, who’s the top Fermi shareholder, said he was fired “without cause” last week and now supports an immediate process to sell the company in order to make “money for all shareholders.” Neugebauer said his family and former executive allies own about 40% of Fermi shares. Neugebauer and former chief financial officer Miles Everson, who abruptly resigned April 20, remain Fermi board members. Also still sitting on the seven-person board is Fermi backer and Neugebauer’s longtime friend, Rick Perry, the former Texas governor and U.S. energy secretary.

Since Neugebauer’s and Everson’s departures were announced, Fermi said April 21 that its “2.0” version “has received significant and positive feedback from multiple potential tenants” and partners. The majority four members of the Fermi board are presumably leading the charge, led by chairman Marius Haas, founding partner of the BayPine private equity firm and a veteran of Dell Technologies, Hewlett-Packard, Compaq, and Intel. 

“Given recent changes in leadership, which position the company for its next chapter of growth and evolution from a startup to a scaled enterprise, the company firmly believes a sale is not in the best interest of its continued momentum on Project Matador, ability to serve potential tenants, and long-term value creation for shareholders,” Fermi said in a statement.

Fermi said it will review “all avenues to maximize shareholder value, which include continued execution of its business plan, strategic investments from third parties, joint ventures, or other transactions.”

Fermi’s “Project Matador” plans are to build 11 gigawatts—enough to power 8 million homes—of nuclear, solar, and natural-gas fired power for a “HyperGrid” to support massive data center complexes on over 5,000 acres of land owned mostly by the Texas Tech University System. Much of the land is leased to the U.S. Department of Energy, which has publicly supported Fermi’s development.

Fermi said a new “office of the CEO” will lead the company while search firm Heidrick & Struggles helps identify a new CEO. The firm will work closely with Haas and two other board members—excluding Perry, Neugebauer, and Everson—to pick a CEO.

The interim office of the CEO will be led by Fermi chief operating officer Jacobo Ortiz and Anna Bofa, who is an observer on the board, and has industry experience with Google and Meta.

In December, an unnamed Fermi tenant canceled a $150 million deal for the data center campus. Fermi had planned to secure an anchor tenant by March, which has yet to occur.

The news also follows reporting by Politico in March that Neugebauer and U.S. Commerce Secretary Howard Lutnick publicly clashed at the Nvidia GTC conference in San Jose.

Neugebauer reportedly complained to Lutnick about plans for U.S. trade deals with South Korea and the blocking—or slow-playing—of direct Korean investments in Fermi’s project. Fermi already is partnered with South Korea’s Doosan Enerbility and Hyundai Engineering & Construction on the development of its nuclear reactors.

At the time, Neugebauer denied being “loud and belligerent” and admitted only to having a “direct conversation” with Lutnick about perceived interference in Fermi’s progress, according to Politico.

Unrelated to Fermi, Neugebauer also has an ongoing legal feud with prominent billionaires Peter Thiel and Ken Griffin over his failed “anti-woke” banking business, GloriFi. Citadel’s Griffin, Thiel, the cofounder of PayPal and Palantir Technologies, and other prominent names were significant financial backers of GloriFi.

The Wall Street Journal previously reported that GloriFi suffered from a chaotic work environment, highlighted by allegedly erratic behavior from Neugebauer.

Neugebauer, who is best known for cofounding the energy-focused private equity firm Quantum Energy Partners, now Quantum Capital Group, shut GloriFi down in 2022 when it ran out of money. The company filed for Chapter 7 bankruptcy protection in early 2023.