Firmus, an artificial intelligence data centre company backed by Nvidia, has withdrawn its plans for a significant initial public offering (IPO) on the Australian Securities Exchange. The cancellation brings to an end what would have been one of the largest listings in Australian history, with the company previously valued at more than $30bn.
In a statement, Firmus attributed the decision to “recent market volatility and prevailing market conditions,” asserting that proceeding with the public offering would not serve the best interests of the company or its shareholders. The firm indicated it will now seek capital through private markets and is considering alternative public and private financing options.
The move comes amid growing scrutiny from investors regarding the massive influx of capital into the AI sector and the uncertain prospects for long-term returns. Several major institutional investors, including Singapore-based trading firm Jane Street and US private equity giant Blackstone, had initially supported the venture. However, UniSuper, one of Australia’s largest pension funds, ultimately declined to participate.
John Pearce, UniSuper’s chief investment officer, told the BBC that while the company presents a compelling business case, the proposed valuation was unjustified. Pearce also expressed concern that Firmus would need to accumulate significant debt to finance its growth strategy, noting the disappointment for the Australian market which was hoping for such a major new listing.
Firmus specializes in constructing and operating liquid-cooled data centres, which it describes as “AI factories,” serving major tech clients such as OpenAI and Meta. Its operations span Australia, Singapore, and other parts of the Asia-Pacific region. While Blackstone declined to comment, inquiries were made to Nvidia and Jane Street.
Australia has emerged as a prime destination for data centre investment due to its abundant clean energy, natural gas supplies, and available land. OpenAI CEO Sam Altman previously suggested the country could become a global leader in the industry. However, the rapid expansion has faced local resistance over environmental impact and noise concerns.
The cancellation coincides with broader turbulence in the AI stock market. Reports that OpenAI’s revenues are lower than anticipated contributed to declines in shares of Nvidia and Oracle. Additionally, OpenAI recently announced it would not pursue a stock market listing this year, citing safety concerns as making it an “ill-advised moment” for going public.
Australia wanted this listing badly. Disappointing for locals, but maybe avoiding a bad deal was the right call after all.
Private markets next sounds risky. I wonder if they can raise that much cash without public scrutiny breathing down their necks.
Is anyone else surprised? I thought AI capital would be endless right now, but volatility is clearly biting hard everywhere.
Wait, did Nvidia lose a major bet? Seems odd for such a powerhouse backer to let this slip away like this.
Valuation concerns are real. UniSuper making the tough call shows maturity, not weakness in the market.