By Priya Raman

AMD will guarantee Fermi's financing for the first 222MW data center at Project Matador in Carson County, Texas. The two companies signed a credit support agreement this week, alongside a second accord outlining expansion of up to 650MW of gross power capacity.

A credit support agreement shifts investment risk from the borrower to the guarantor. In practice, AMD now stands behind Fermi as the developer seeks financing for its initial build-out. Fermi needs the backing. Its Nasdaq-listed shares hit a record low of $3.43 on Monday, against $25 on its first trading day a year earlier. At time of writing, the stock trades at $3.72.

What does the guarantee cover?

The agreement supports the first deployment of 222MW of IT capacity (the power delivered to computing hardware, excluding cooling and overhead). A second agreement sets a framework for phases two and three, reaching up to 650MW of gross power capacity. Fermi expects the first phase online in the second half of 2027.

AMD has a direct commercial stake in the outcome. Thousands of its Instinct GPUs (data center accelerators for AI training and inference) will run at the site under a separate deal Fermi signed in August with AI cloud provider TensorWave, covering up to 650MW of space. Fermi values that contract at up to $6.5 billion over 15 years.

"Our strategic partnership establishes a framework for phases two and three," Fermi CEO Lee McIntire said. "We have the land, the permits, the water, the power equipment, and the fiber network that give us distinct performance advantages."

That claim is notable for what it omits: a completed financing package. Land, permits and utilities do not themselves guarantee construction. The AMD guarantee addresses the gap, but Fermi has not disclosed the agreement's size or duration.

Why is AMD underwriting a customer's landlord?

Chip vendors rarely guarantee their customers' landlords. AMD's move follows a familiar logic: it must fill data centers with Instinct GPUs to sustain what it calls its data center momentum against Nvidia's dominant market position.

"The pace of AI innovation is driving unprecedented demand for compute and the large-scale data center infrastructure needed to support it," said Mathew Hein, senior vice president and chief strategy officer of corporate development at AMD. "Together, we are enabling customers to deploy AMD-powered AI infrastructure at scale."

Hein's statement commits AMD to nothing specific. It names no capacity targets, no dates and no financial terms. Investors should read the guarantee, not the press release, for the actual obligations. Neither company has published those terms.

What is Project Matador?

Fermi, founded in January 2025 by former Texas governor and US energy secretary Rick Perry and first CEO Toby Neugebauer, aims to deliver a campus of up to 17GW at full build-out, with an adjoining energy campus. The site sits on Texas Tech University system land near Amarillo and could span 18 million sq ft (1.67 million sqm).

The company plans a mix of on-site generation: natural gas, solar, wind and nuclear. Nuclear capacity remains a stated intent, not a contracted supply. Fermi has disclosed no power purchase agreements for any of these sources.

Can Fermi survive to 2027?

The company's 2026 has been turbulent. A non-binding letter of intent with an unnamed "investment grade-rated tenant", announced last year as the campus's first customer, collapsed. The withdrawal triggered a class action lawsuit and a share price collapse.

In April, Neugebauer and then CFO Miles Everson departed. Fermi has not named the causes of either exit beyond standard corporate announcements.

The AMD deal marks the first credible counterweight to that record. It gives lenders a guarantor with investment-grade standing and gives TensorWave a supplier with skin in the game. It does not, however, resolve the class action, replace the withdrawn anchor tenant, or explain the executive departures.

The first 222MW arriving in late 2027 remains a target, not a construction milestone. Fermi has announced no signed construction contracts. The guarantee improves the odds; it does not finish the building.