Nuclear AI startup Fermi abruptly loses its CEO and CFO, putting its Texas project in doubt

Fermi, a startup that set out to build nuclear power plants to run AI data centers, has lost two key executives at once: its CEO and its CFO. Both left the company suddenly and at the same time, casting doubt on the future of its ambitious AI campus in Texas. Fermi was founded with the involvement of Rick Perry, the former Texas governor who served as US Energy Secretary in the Trump administration.

The bet was that nuclear power would answer the AI industry's rapidly growing demand for electricity: large data centers need gigawatts of steady power, and coal and gas plants don't fit the climate commitments of big tech companies. The idea arrived in the right place at the right time. Nuclear power is enjoying a global renaissance precisely because of the AI boom: Microsoft signed a deal to restart a reactor at Three Mile Island, Google is investing in small modular reactors, and Amazon is striking deals with power operators.

Against that backdrop, a startup with a former Energy Secretary among its founders looked like a strong bet for investors. But the company ran into serious difficulties executing its nuclear campus project in Texas. The state is the largest electricity consumer in the US, and its ERCOT grid runs in isolation from the rest of the national grid.

That creates specific risks — recall the February 2021 winter blackout — but also opportunities: Texas actively courts data centers with cheap land and a business-friendly climate. The simultaneous exit of the CEO and CFO sends a serious signal to investors and partners. The CFO is responsible for raising capital, and without capital there is no way to build nuclear infrastructure, one of the most capital-intensive areas of the energy sector.

The CEO sets strategic direction and manages relationships with regulators. Losing both at once usually points to a deep corporate conflict, a change in investment strategy, or a fundamental rethink of the business model. Fermi has not disclosed the reasons for the resignations and has not announced successors.

For the nuclear-for-AI market, the episode is another reminder of how vast the gap is between an ambitious idea and actually building a nuclear plant. Regulatory approvals in the US take years, and reactor construction takes decades. Small modular reactors, which most new players are betting on, still exist mostly on paper.

NuScale Power, the first US company to receive SMR approval from the Nuclear Regulatory Commission, canceled its first project in 2023 because of rising costs. That's exactly why big tech companies prefer to cut deals with existing nuclear plant operators rather than build from scratch. Google, Microsoft, and Amazon are taking that route, through long-term power purchase agreements rather than by launching their own nuclear startups.

The sudden double departure at the top is more than a personnel story. It signals that the gap between nuclear ambitions and operational reality remains painfully wide, even for well-connected startups with big names on board. What happens to Fermi next is still unknown, but investors in the nuclear-for-AI sector have received another reminder: in this business, a star-studded founding team isn't enough.