In this week's issue:

  • The Texas AI data center gold rush is separating real money from vapor — one company just crashed 86% from a $12B+ valuation
  • Austin Energy is a government monopoly hiding in your electric bill — and most residents have no idea
  • ARM is reportedly in talks to join TERAFAB's R&D initiative, and the Austin Business Journal has sources
  • ACL Fest 2026 drops its lineup tomorrow morning

Rock and roll.

Top Stories

Texas Data Centers: The Gold Rush Is Separating Real From Fake

The serious money is moving fast and the numbers are not soft. Newmark just advised on a $3.4 billion joint venture for a 206MW AI campus at Lancium's Abilene site — 100,000 GPUs, 100% long-term leased to an unnamed Fortune 100 hyperscaler, built for the hardest AI workloads on the planet. Coatue launched "Next Frontier," a powered-land acquisition vehicle with a JV alongside Fluidstack — the same Fluidstack that separately signed a $50 billion deal to build data centers for Anthropic. Blackstone is deploying. And on May 2, Round Rock Mayor Craig Morgan won re-election in an early-vote landslide, cementing the Austin metro's pro-data center political direction for another term. None of this is promotional speculation. This is capital allocation at scale, supported by long-term leases and Fortune 100 anchor tenants.

On the other side of the ledger: Fermi America (ticker: $FRMI), the Toby Neugebauer-backed nuclear AI data center startup that IPO'd in October 2025 at a valuation Bloomberg pegged near $15 billion, is now trading at approximately $5 per share — an 86% collapse from its peak near $37. The company has accumulated $486 million in losses, has no major tenants, and burned through its capital base. Neugebauer was fired "for cause" and immediately filed a lawsuit challenging his removal from the board. Multiple class-action suits have followed over allegedly misleading claims. The company rebranded as "Fermi 2.0" in April, brought in new leadership, and is still officially committed to "Project Matador" near Abilene — whose early gas/solar phases have permits. The 11GW nuclear buildout is a 2030s storyline at best, with no EUV equipment orders and massive capex requirements still unfunded.

What reality actually looks like: construction professional Mike Carey posted an aerial of the Crusoe 2GW site northwest of Abilene, which is currently consuming 1.2GW and has another 800MW under construction. Total program cost: north of $30 billion. Daily headcount: 6,000+ skilled trades workers and 400+ professional staff, with concrete batched on-site. Separately, a unit economics breakdown puts the GPU spend alone at roughly $60 billion at 2GW scale — $30M per megawatt just for chips. The real constraint isn't capital. It's electricians and civil engineers, a decade of whom were lost to software roles and FAANG salaries. New state requirements now oblige data centers to cover more of their grid costs and maintain backup power, adding friction for pretenders. The market is running a brutal filter right now: operators and capital-backed builders are advancing; vaporware is being vaporized.

Sources: Fermi America collapse, Fermi 2.0 press release, Newmark/Coatue VC surge, Coatue/Fluidstack/Anthropic, Construction scale at Abilene, Round Rock election

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Austin Energy: The Government Monopoly Hiding in Your Electric Bill

Here is something most Austin residents genuinely do not know: when Texas passed Senate Bill 7 in 1999 — effective 2002 — and restructured the state's electricity market to allow retail competition, municipal utilities were given an opt-out. Austin Energy took it. San Antonio's CPS Energy took it too. The result is that roughly 500,000 Austin electricity customers have zero ability to shop for a better rate, at a time when most Texans in Houston, Dallas, and everywhere else in deregulated ERCOT territory can pick from dozens of providers. You did not choose Austin Energy. You were assigned to it by geography.

The scale of what you're funding is not small. Austin Energy operates on a $1.45 billion annual budget, with approximately $544 million in power supply revenue. It is technically a city department — not a corporation — which means surplus revenue flows directly into the City of Austin's general fund. Your electric bill is quietly subsidizing city government operations with no competitive pressure to innovate, cut costs, or improve service. The last formal rate review process was in 2015. No competitive bids. No market discipline. Just a city department that controls your utility and captures the margin. Congressman Greg Casar recently went viral criticizing utility monopolies charging "25% profit margins" — but his own Austin constituents' utility IS the monopoly, and it's government-owned, not corporate. The irony is either lost on him or he's counting on it being lost on you.

For a city that has built its identity around freedom, markets, and zero state income tax, this is a jarring contradiction that nobody seems particularly motivated to fix. There is no formal push at the City Council level to re-enter the competitive market, and no serious legislative effort in Austin to revisit the SB 7 opt-out. The discourse is entirely online commentary. The situation is what it is: a municipal utility with a captive customer base, no competitive pressure, and a direct pipeline to city government coffers. Every month when you pay your electric bill in Austin, you are participating in a government revenue model that most Texans — living in a deregulated market — left behind two decades ago.

Sources: Austin Energy history, Austin Energy FY2024 Annual Report, Texas deregulation vs. Austin monopoly, Casar utility bill viral post

Weird Austin

One Thing

Texas is simultaneously running a $3.4 billion data center gold rush and hiding a government electricity monopoly inside your monthly light bill. That range — from audacious private capital to sleepy municipal capture — is the actual Austin story right now.

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