Fermi Inc. Compares AI Race to Manhattan Project Amid Nuclear Ambitions

Fermi Inc., a nuclear power-plant developer, has drawn a striking parallel between the current race to develop artificial intelligence technology and the World War II initiative to create the first atomic bomb. In a letter to shareholders, the company declared, “Make no mistake, America is at war,” highlighting its ambitions to establish a significant data-center campus in the Texas Panhandle. This statement comes as Fermi reported its first quarterly earnings following its initial public offering six weeks earlier.

The co-founders of Fermi, including former U.S. Energy Secretary Rick Perry, emphasize the substantial challenges associated with powering data centers across the United States. Their flagship project, known as the Matador project, is set to feature four large nuclear reactors, which are not expected to be operational until the 2030s. In the meantime, the company is working on installing natural gas turbines at the site to meet immediate energy demands.

The letter also highlights the competitive landscape between the United States and China in the development of AI technology. Fermi asserts that the U.S. is currently lagging behind, citing China’s ambitious plans to construct 33 nuclear reactors while the U.S. has no commercial atomic projects under construction. “We are humbled to partner with you on the Manhattan Project of our generation,” the letter states, framing the endeavor as a crucial response to a significant national security threat.

Energy analyst Timm Schneider, founder of The Schneider Capital Group, remarked on the theatrical tone of the shareholder letter, suggesting it felt more like a screenplay by Francis Ford Coppola than a typical earnings update. This dramatic comparison underscores the urgency Fermi associates with its mission.

Financially, Fermi remains in a precarious position, reporting a net loss of $353.2 million for the year ending September 30, 2023. The company has cash reserves of $183 million and a market capitalization of approximately $15 billion. Despite the losses, Fermi’s bold rhetoric reflects a commitment to its vision of becoming a leader in the intersection of nuclear energy and artificial intelligence.

As the race to innovate in AI continues, Fermi’s ambitious plans and stark comparisons to historical precedents highlight both the potential and risks associated with these technologies. The company’s dual focus on nuclear energy and data center infrastructure aims to address a growing demand for power while positioning itself as a key player in the future of AI development.