Texans Are Fighting a 6,000 Acre Nuclear-Powered Datacenter

Matthew Gault ·Jan 8, 2026 at 9:49 AM

Billionaire Toby Neugebauer laughed when the Amarillo City Council asked him how he planned to handle the waste his planned datacenter would produce. 

“I’m not laughing in disrespect to your question,” Neugebauer said. He explained that he’d just met with Texas Governor Greg Abbott, who had made it clear that any nuclear waste Neugebauer’s datacenter generated needed to go to Nevada, a state that’s not taking nuclear waste at the moment. “The answer is we don’t have a great long term solution for how we’re doing nuclear waste.

(snip-you can hear a 404 Media podcast if you click through to the story on 404, up there in the post title.)

The meeting happened on October 28, 2025 and was one of a series of appearances Neugebauer has put in before Amarillo’s leaders as he attempts to realize Project Matador: a massive 5,769 acre datacenter being built in the Texas Panhandle and constructed by Fermi America, a company he founded with former Secretary of Energy Rick Perry.

If built, Project Matador would be one of the largest datacenters in the world at around 18 million square feet. “What we’re talking about is creating the epicenter for artificial intelligence in the United States,” Neugebauer told the council. According to Neugebauer, the United States is in an existential race to build AI infrastructure. He sees it as a national security issue.

“You’re blessed to sit on the best place to develop AI compute in America,” he told Amarillo. “I just finished with Palantir, which is our nation’s tip of the spear in the AI war. They know that this is the place that we must do this. They’ve looked at every site on the planet. I was at the Department of War yesterday. So anyone who thinks this is some casual conversation about the mission critical aspect of this is just not being truthful.”

But it’s unclear if Palantir wants any part of Project Matador. One unnamed client—rumored to be Amazon—dropped out of the project in December and cancelled a $150 million contract with Fermi America. The news hit the company’s stock hard, sending its value into a tailspin and triggering a class action lawsuit from investors.

Yet construction continues. The plan says it’ll take 11 years to build out the massive datacenter, which will first be powered by a series of natural gas generators before the planned nuclear reactors come online.

Amarillo residents aren’t exactly thrilled at the prospect. A group called 806 Data Center Resistance has formed in opposition to the project’s construction. Kendra Kay, a tattoo artist in the area and a member of 806, told 404 Media that construction was already noisy and spiking electricity bills for locals.

“When we found out how big it was, none of us could really comprehend it,” she said. “We went out to the site and we were like, ‘Oh my god, this thing is huge.’ There’s already construction underway of one of four water tanks that hold three million gallons of water.”

For Kay and others, water is the core issue. It’s a scarce resource in the panhandle and Amarillo and other cities in the area already fight for every drop. “The water is the scariest part,” she said. “They’re asking for 2.5 million gallons per day. They said that they would come back, probably in six months, to ask for five million gallons per day. And then, after that, by 2027 they would come back and ask for 10 million gallons per day.”

During an October 15 city council meeting, Neugebauer told the city that Fermi would get its water “with or without” an agreement from the city. “The only difference is whether Amarillo benefits.” To many people it sounded like a threat, but Neugebauer got his deal and the city agreed to sell water to Fermi America for double the going rate.

“It wasn’t a threat,” Neugebauer said during another meeting on October 28. “I know people took my answer…as a threat. I think it’s a win-win. I know there are other water projects we can do…we fully got that the water was going to be issue 1, 2, and 3.”

“We can pay more for water than the consumer can. Which allows you all capital to be able to re-invest in other water projects,” he said. “I think what you’re gonna find is having a customer who can pay way more than what you wanna burden your constituents with will actually enhance your water availability issues.”

According to Neugebauer and plans filed with the Nuclear Regulatory Commission, the datacenter would generate and consume 11 gigawatts of power. The bulk of that, eventually, would be generated by four nuclear reactors. But nuclear reactors are complicated and expensive to make and everyone who has attempted to build one in the past few decades has gone over budget and they weren’t trying to build nuclear power plants in the desert.

Nuclear reactors, like datacenters, consume a lot of water. Because of that, most nuclear reactors are constructed near massive bodies of water and often near the ocean. “The viewpoint that nuclear reactors can only be built by streams and oceans is actually the opposite,” Neugebauer told the Amarillo city council in the meeting on October 28.

As evidence he pointed to the Palo Verde nuclear plant in Arizona. The massive Palo Verde plant is the only nuclear plant in the world not constructed near a ready source of water. It gets the water it needs by taking on the waste and sewage water of every city and town nearby.

That’s not the plan with Project Matador, which will use water sold to it by Amarillo and pulled from the nearby Ogallala Aquifer. “I am concerned that we’re going to run out of water and that this is going to change it from us having 30 years worth of water for agriculture to much less very quickly,” Kay told 404 Media.

The Ogallala Aquifer runs under parts of Colorado, Kansas, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, and Wyoming. It’s the primary source of water for the Texas panhandle and it’s drying out. 

“They don’t know how much faster because, despite how quickly this thing is moving, we don’t have any idea how much water they’re realistically going to use or need, so we don’t even know how to calculate the difference,” Kay said. “Below Lubbock, they’ve been running out of water for a while. The priority of this seems really stupid.”

According to Kay, communities near the datacenter feel trapped as they watch the construction grind on. “They’ve all lived here for several generations…they’re being told that this is inevitable. Fermi is going up to them and telling them ‘this is going to happen whether you like it or not so you might as well just sell me your property.’”

Kay said she and other activists have been showing up to city council meetings to voice their concerns and tell leaders not to approve permits for the datacenter and nuclear plants. Other communities across the country have successfully pushed datacenter builders out of their community. “But Texas is this other beast,” Kay said.

Jacinta Gonzalez, the head of programs for MediaJustice and her team have helped 806 Data Center Resistance get up and running and teaching it tactics they’ve seen pay off in other states. “In Tucson, Arizona we were able to see the city council vote ‘no’ to offer water to Project Blue, which was a huge proposed Amazon datacenter happening there,” she said. “If you look around, everywhere from Missouri to Indiana to places in Georgia, we’re seeing communities pass moratoriums, we’re seeing different projects withdraw their proposals because communities find out about it and are able to mobilize and organize against this.”

“The community in Amarillo is still figuring out what that’s going to look like for them,” she said. “These are really big interests. Rick Perry. Palantir. These are not folks who are used to hearing ‘no’ or respecting community wishes. So the community will have to be really nimble and up for a fight. We don’t know what will happen if we organize, but we definitely know what will happen if we don’t.”

About the author

Matthew Gault is a writer covering weird tech, nuclear war, and video games. He’s worked for Reuters, Motherboard, and the New York Times. More from Matthew Gault

Image via Fermi America.