Tensions reportedly flared between Fermi America CEO Toby Neugebauer and U.S. Commerce Secretary Howard Lutnick during a recent AI conference in Silicon Valley, according to a report by Politico. The incident occurred at the Nvidia GTC AI event in San Jose, where the two prominent figures engaged in a discussion regarding a multi-billion dollar data centre project called Project Matador.
:max_bytes(150000):strip_icc():format(jpeg)/Toby-Neugebauer-Howard-Lutnick-32726-efdec2cc11464f86afa14e0aed6266ce.jpg)
Sources familiar with the exchange indicated that the confrontation arose when Neugebauer raised concerns about South Korean investment in the ambitious initiative, which has an estimated budget of around £60 billion and is to be based in Carson County, Texas. Eyewitness accounts shared with Politico suggest that Neugebauer confronted Lutnick by stating, “everyone says you’re blocking it.” Lutnick reportedly responded that he was unaware of what Neugebauer was referring to.
In response to the characterisation of their dialogue as “heated”, Neugebauer issued a clarification to Politico, asserting that the discussion was merely a “direct conversation.” He expressed his frustration over what he viewed as Lutnick’s impediments to the progress of Project Matador, also known as the Donald J. Trump Advanced Energy and Intelligence Campus. The details surrounding any potential interference from Lutnick or his office have not been specified.
In light of the investing climate, it is notable that last July, Lutnick announced a substantial South Korean investment commitment of $350 billion into the United States. Neugebauer has since been vocal about his desire for some of these funds to contribute to Project Matador. “I spoke with the secretary over the fact that we are the only actionable site with Koreans ready to partner and break ground in Amarillo this year, and I’m frustrated with the lack of progress,” he mentioned in his public statement.
Reports indicate that Lutnick’s security team intervened during the altercation, with witnesses claiming that they physically separated the two executives. However, Neugebauer disputed this account, asserting that he was simply guided towards Lutnick’s staff rather than being forcefully separated.
Neugebauer emphasised in his statement that he was keen to ensure that political considerations should not hinder business opportunities that would ultimately benefit the U.S. economy. While admitting frustration over the stalled negotiations, he did not elaborate on the particulars of the disagreement.
Both the Department of Commerce and Fermi America had not responded to requests for comment at the time of publishing. Neugebauer’s professional background includes a tenure at securities firm Kidder, Peabody & Co. before establishing Windrock Energy and Quantum Energy. He has a long-standing professional relationship with Lutnick, having previously interacted with the commerce secretary’s sons in business contexts.
Fermi America was co-founded by Neugebauer and former Texas Governor Rick Perry in January 2025, with the company branding Project Matador as its flagship initiative. The project is intended to develop a robust infrastructure integrating low-carbon power sources, including natural gas, nuclear energy, and solar power to support large-scale AI and computational demands.
The company has already secured deals regarding nuclear power with South Korea’s Doosan Enerbility and Hyundai Engineering & Construction, further highlighting the international scope and ambition of Project Matador.
As the demand for data centres surges—reported to consume approximately 4.4% of total U.S. electricity in 2023 and potentially rising to between 6.7% to 12% by 2028—concerns among residents about rising electricity costs have begun to surface. Some community members have reportedly turned down lucrative offers from tech firms aiming to establish data centres on their land, illustrating the tension between local interests and corporate development ambitions.
The clash between Neugebauer and Lutnick underscores the complex interplay of investment, politics, and energy needs in the evolving landscape of artificial intelligence and data-centric infrastructure. This incident at the conference may signal the challenges ahead in bridging the gap between private enterprise and governmental oversight in the arena of transformative technological investments.