Data center developer's IPO shows more confidence in power and AI
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Power and data center developer Fermi saw its share price jump 55% on its first day of trading Wednesday, giving it a market cap in the $18 billion range.
Why it matters: Fermi's IPO is the latest sign of capital confidence in power and AI — and not even the only one to emerge over the last day or so.
The latest: This morning, ArcLight Capital Partners said the Canada Pension Plan Investment Board is investing $1 billion for a stake in its AlphaGen power portfolio.
- Meeting AI power demand is among the explicit rationales, the companies said.
- The FT reported that a BlackRock unit is in advanced talks to buy Virginia-based power group AES for around $38 billion including debt — a figure Jefferies analysts called a "robust premium."
- AES is heavily invested in renewables and has deals with tech giants like Meta and Amazon.
Catch up quick: Fermi — co-founded by Trump 1.0 DOE head Rick Perry — is planning a massive energy and data center campus in Texas.
- New gas generation is the first part, but the wider vision includes lots of new nuclear, too.
What they're saying: "Several IPOs this year have tapped into that massive demand for AI infrastructure," Matt Kennedy, a senior strategist with Renaissance Capital.
- He points to IPOs this year from AI computing and equipment companies CoreWeave and White Fiber.
And watch how much more aggressively Trump administration officials look to help the overall buildout — and specific companies.
- Fermi plans to seek support from DOE's loan office and other agency programs, SEC filings show.
- And Trump 2.0 officials are looking to pull many federal levers to speed up AI data centers and related energy projects.
The big picture: "There is widespread awareness in DC of the challenges in providing timely access to power for new data center projects, and an increasing sense of urgency to address this challenge, given that China does not face material power challenges," a Morgan Stanley note this week says.
What we're watching: The future of power sector M&A for the balance of this year and 2026, following a robust first half of 2025.
- "The increasing energy demands driven by advancements in AI, particularly within data centers, highlight the strategic importance of vertical integration efforts," KPMG analysts recently wrote.
The bottom line: It's a hot-hot-hot time in the AI and related energy spaces as companies rush to invest in data centers and supply them with power.
- Industry execs are tossing around massive capex numbers. But a shakeout could loom, and not everyone will compete well either.
- "The capex spend is real. I think the question is, how much money can be made off of it," said Kennedy, whose firm researches the IPO market and offers ETFs of newly public companies.
