Firmus Technologies withdrew its planned Australian listing after investors challenged its valuation and questioned whether Australia’s energy infrastructure could support the data centres it wants to build. The decision stopped a proposed $7 billion capital raise and left the company seeking further private funding as it plans a Nasdaq listing next year.
The Sydney-based AI startup had come close to listing on the Australian Stock Exchange at a market capitalisation of $43.7 billion. The float could have been the second-biggest in Australian history and the largest initial public offering since Telstra listed in 1997. Investors balked at the proposed price, limited detail in the prospectus and uncertainty over future growth in AI and data centres.
A regional infrastructure plan
Oliver Curtis, Tim Rosenfield and Jonathan Levee founded Firmus in 2019. The company planned to use listing proceeds and additional borrowing to build data centres in Australia, Singapore, Malaysia and Indonesia. Its website said it had two operational sites, in Australia and Singapore, and five sites “under development.”
The proposed expansion raised questions about whether Australia’s energy infrastructure could support the facilities. Investors weighed data-centre capacity and power supply alongside the company’s valuation. The base article does not quantify the energy required by the proposed sites.
Firmus had previously said it secured $US2 billion ($2.86 billion) in investor commitments, including from Nvidia and Blackstone. Nvidia held a 7.2 per cent stake and reportedly provided funding and sold the company chips. Nvidia got a request for comment after the float was withdrawn.
Floodline Research founder Anna Wu said Nvidia could make a larger investment in Firmus. She described the chipmaker’s global investment activity as “going around the world buying anything that it thinks is going to take over in the local market.” Wu called Nvidia’s partnership with Firmus “an endorsement ... but also, it's a move towards expanding in the Australia-Pacific region and trying to integrate with the local infrastructure provider.”
Investors retreat from the proposed price
By Wednesday night, bankers were reportedly weighing a cut to Firmus’s valuation, towards $30 billion. The reported offer price dropped from $11 to $8.25 by Thursday. On Thursday morning, as the company tried to save the offering, it withdrew from an appearance at a federal parliamentary inquiry into AI. By Friday, the float was gone.
Morningstar senior market strategist Lochlan Holloway said Firmus was valued similarly to Woolworths. “The economics look good now and the growth is very fast now, but what that looks like again in five or 10 years is the big question mark,” he said.
Ten Cap Investment co-founder and lead portfolio manager Jun Bei Liu called the offering overpriced. “The valuation for the company was way too high to start with,” she said. “It is almost three times what the valuation was when they raised money just a few months ago.” Liu said the company might have to return to public markets because “it's a very capital-intensive business. It requires listed shares.”
Public-market pressure and the next listing
Commentators pointed to anxiety about an AI bubble and public and political concerns over data-centre growth. Philip Wohl of Reliance Investment Research said: “Firmus ran into a wall of AI anxiety right at the time that they had planned to list.” He said investors hadn’t accepted the company’s target price amid uncertainty about AI hardware and demand.
Wu said Nasdaq offers a larger, more accepting market for emerging technology, but warned that tougher competition could make it harder for an Australian company to attract the same attention and valuation as US peers. The Nasdaq had recently reached record highs and was up 43 per cent in the past year, while the ASX All Technology Index had fallen almost 18 per cent that year, including 9 per cent in September alone.
Holloway said Nvidia’s investment made sense because Firmus’s data centres could put its chips to use. He said customers such as Meta and OpenAi could rely on partnerships with companies such as Firmus to access chips, which he described as being in very short supply. Firmus’s founders are seeking further private funding, and the company plans a Nasdaq listing next year.