Fermi America Sparks Texas Energy Revolution

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00:00Redefining the term wildcatter in Texas.

00:03The son of a former congressman, Nagabauer kicked off his career at Kidder Peabody before

00:07branching out on his own in private equity.

00:09He is now pioneering the development of a next generation private electric grid to support

00:15an 11 gigawatt, 6,000 acre AI data center with the former governor of Texas and U.S.

00:22Energy Secretary Rick Perry.

00:23Nagabauer joins us now after the IPO of his new company, Fermi America.

00:28And, Toby, this is an audacious undertaking.

00:32I mean, 11 gigawatts is far more energy than the entire city of New York uses.

00:40How confident are you going to get this done?

00:43Well, you're right.

00:44It's almost double the amount of electricity that New York consumes and produces.

00:51And the reason we're able to do this is we're in one of the most blessed natural resources

00:56part of America.

00:58So we have an unlimited amount of natural gas.

01:02We have the gas pipeline infrastructure.

01:05And that's what gives us the confidence.

01:07We have what is necessary to cool it.

01:10We have the fiber to export the AI compute from it.

01:13So that's what makes it possible to make such a bold statement about 11 gigawatts.

01:21And then we have a team that has built over 25 gigawatts of power all over the world in

01:27their career.

01:28So it's a combination of the infrastructure, the natural resources, and the people to execute

01:33to make it happen.

01:34And I know you're hoping to draw some data center and hyperscaler tenants into this, Toby.

01:39How have those conversations been going?

01:40Who are you talking to?

01:41Are you close to signing anybody on?

01:44Yes.

01:45I think as the market knows, we have a letter of intent with one of the biggest companies

01:50in the world.

01:51We've been with that company all week, getting ready.

01:55In fact, we're basically constructing for them now.

01:58We just have to catch up our project financing, et cetera, because we've been so busy.

02:04And that is publicly known to be scheduled for closing in December.

02:10So we are assuming success with our current customers.

02:15And then we're in conversations and changing papers with four of the other biggest companies

02:20on the planet.

02:21There's no shortage of demand for the electrons that Fermi America can produce out here at

02:26this site.

02:27So how much of this power is going to be natural gas?

02:32How much of this, as Texas is known for, obviously, how much is going to be nuclear?

02:36The U.S. has been slow to bring more nuclear online, but I know you're in a good position

02:42for that as well.

02:43And how much is going to be solar?

02:45I mean, what's the breakdown look like?

02:46Well, again, we're heavily focused on solar, how you should think about how we look at three

02:53units of gas or nuclear to every unit of solar.

02:58So we're talking about a very big solar operation.

03:02What's great about our site is we can do 11 gigawatts of power, irrespective of nuclear.

03:08But as I believe is to be a real superpower, America has to have nuclear-powered submarines,

03:16nuclear-powered aircraft carriers, and a real superpower has nuclear-powered artificial

03:22intelligence.

03:23The Chinese are building 22 reactors right now.

03:26They're not building those reactors to lower air conditioning costs in China.

03:31They're building those nuclear reactors to power artificial intelligence.

03:35And we think that this administration gets that, and I expect at least six gigawatts

03:42of nuclear power.

03:43As you know, our site is already on America's most important nuclear site.

03:48And Toby, it speaks to the national security concerns.

03:52And Fermi and you yourself are very tied to public service.

03:56Your dad was a former congressman for Texas' 19th District.

03:59Your co-founder is the former U.S. Secretary of Energy, Rick Perry.

04:03Just given those credentials that are being brought into Fermi, what do you see as the

04:07mix between private and public investment that's necessary in our energy capabilities

04:12to fuel AI?

04:14Yeah.

04:15You know, what we don't want to do is to create incentives to have bad spending like we've

04:23had in nuclear in the past.

04:24We want an incentive structure that rewards success.

04:27And that means bringing nuclear online, on time, on budget in the United States.

04:33What I do see us in terms of our relationship with the government is providing the power that

04:40they need for their own artificial intelligence needs.

04:45So we're not looking for a handout.

04:47We're looking for delivering a high-quality nuclear-powered artificial intelligence product

04:54for the United States of America.

04:57I wonder about guardrails here.

05:00On Tuesday, we're going to talk with Paul Tudor Jones, and he has argued about the need

05:06for some kind of regulation, some kind of checks and balances on AI, or he's worried what it'll

05:12do to humanity.

05:12On the other hand, widely reported that Peter Thiel recently said regulation will bring on

05:18the antichrist.

05:20What do you think, Toby, about regulating this?

05:25Because we are in essentially an AI arms race, right?

05:28We want to have better AI technology than the Chinese.

05:31And I mean, every country in the world wants to be at the forefront of that.

05:34So how do you deal with regulation?

05:37Well, I think first and foremost, what we've got to do is we have to unleash electrons, because

05:43it won't even matter what the regulatory regime is, if we don't rapidly increase the amount

05:49of production of electrons in this country, we are going to lose no matter what, whether

05:55you regulate or don't regulate.

05:57So that's our number one focus.

05:59And what we did at Fermi America is creating a private utility we don't take away from the

06:06consumer, and we can regulate ourselves, because our private utility is designed for our customers.

06:15As it relates to whether I agree with Paul and I agree with Peter, and it's going to be

06:22a really big decision.

06:23What we've got to do, though, is be in the game, and I'm very concerned with how far behind

06:32on the electron production we are with the Chinese.

06:35I don't think that's getting the attention it really deserves.

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