The project is being developed by Fermi America, a company founded by billionaire Toby Neugebauer and former U.S. Secretary of Energy Rick Perry. Plans call for a massive complex with a total capacity of 11 gigawatts. In its initial phase, the facility would run on natural gas, before transitioning to four nuclear reactors over time.
During a meeting of the Amarillo city council, Neugebauer acknowledged that there is currently no long-term solution for nuclear waste disposal, mentioning Nevada as a potential destination for spent fuel. Environmental activists, however, point to water consumption as the most immediate threat. At peak operation, the data center could require up to 10 million gallons of water per day, placing enormous strain on already depleted freshwater sources that are critical for regional agriculture.
“Water is the most alarming issue,” said Kendra Kaye, a member of the grassroots group 806 Data Center Resistance. “They are asking for 2.5 million gallons per day now, but in six months it will be five million.”
The project has already encountered setbacks. In December, an anonymous client—widely rumored to be Amazon—reportedly withdrew from a $150 million contract, triggering a drop in Fermi America’s share price and prompting a class-action lawsuit from investors. Despite this, construction on Project Matador is continuing.
This situation highlights a growing tension in the AI boom—the clash between national ambitions for large-scale computing infrastructure and the limits faced by local communities and authorities. As AI continues to scale, regulatory pressure around water use, energy demand, and nuclear risk is almost certain to intensify in 2026–2027, potentially slowing or fundamentally reshaping AI projects that underestimate environmental and social constraints.
