Fermi (NASDAQ: FRMI) stock surged more than 20% today after the company finally landed its first major tenant for Project Matador, its flagship AI infrastructure campus in Texas. 

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The deal with AI cloud provider TensorWave is expected to generate roughly $6.5 billion over 15 years and represents the first major proof that demand for the project is real.

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Under the agreement, TensorWave will lease a 222-megawatt AI data center at Project Matador, with occupancy scheduled to begin in the second half of 2027. The contract also includes options to expand into two additional facilities, bringing total capacity to more than 650 megawatts if those options are exercised.

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That's a meaningful development because customer demand had become the biggest question surrounding the company.

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Fermi has already invested more than $1.5 billion into Project Matador and says approximately 6 gigawatts of its planned 17-gigawatt AI and power campus have already been permitted. But until now, investors had yet to see a major customer commit to the project, leaving uncertainty about whether the company's ambitious buildout would ultimately attract hyperscale AI tenants.

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TensorWave helps answer that question.

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The company provides AI cloud infrastructure built primarily around AMD's Instinct GPUs, giving enterprise customers an alternative to Nvidia-powered cloud providers. As demand for AI training and inference continues to grow, cloud providers need enormous amounts of power, land, and computing capacity. Large campuses like Project Matador are designed to meet that need.

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Of course, one lease doesn't eliminate execution risk.

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Fermi still has to finance, construct, and deliver one of the country's largest AI infrastructure projects. The company also hopes to secure additional tenants to fill the remaining capacity across the campus. But this agreement significantly reduces one of the market's biggest concerns: whether customers would actually commit to Project Matador.

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For now, investors appear encouraged. The lease not only provides a long-term revenue stream, but it also validates Fermi's strategy of building large-scale, privately powered AI infrastructure at a time when access to electricity has become one of the industry's biggest bottlenecks.

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