Firmus, the Nvidia-backed builder of AI data centres, has withdrawn its application to list on the ASX, scrapping what would have been the largest float on the Australian market since Telstra in 1997. The company blamed recent market volatility and said the offer would not properly reflect its long-term prospects. It will now seek private funding while it considers other options.
Co-chief executives Oliver Curtis and Tim Rosenfield had been aiming for a valuation of about $44 billion, with the capital raise expected to bring in around $7 billion. Investors balked at the $11 share price amid concerns about an AI bubble, and a day earlier reports said the company and its advisers were considering a smaller offer at $8.25 a share. Some investors were also uneasy about Curtis’s past: the former investment banker served a year in prison about a decade ago for insider trading. Nvidia holds a 7.2 per cent stake. Firmus says its portfolio covers seven AI factories in Australia, Singapore, Indonesia and Malaysia. Two, in Australia and Singapore, are running, and five are in development with a target of being ready for service within 24 months. UniSuper chief investment officer John Pearce called the outcome disappointing and said the market needs new stories. “It just doesn’t have a compelling valuation,” he said, adding that the stock was “priced to perfection” and would need repeated raisings of debt and equity to grow.
Debt was the other sticking point. Morningstar senior market strategist Lochlan Holloway described neo-cloud operators as heavily geared, borrowing against customer contracts to buy chips and repaying lenders from the rent. Firmus expects about US$30 billion of debt once its data centres are built, roughly six times the US$5 billion of operating earnings it forecasts for 2028. Holloway said borrowing alone does not make a bubble, but that credit has featured in past boom-and-bust cycles.
The float’s collapse follows the loss of a partner. Data centre group CDC had planned to build facilities with Firmus but dropped the arrangement, and its chief strategy officer Jack Dan told a federal parliamentary inquiry into AI that the partnership began when Firmus was more focused on sovereign AI capacity in Australia, a focus he said has since shifted. Firmus has told shareholders it will provide more information as its funding options develop.
