Datacentre firm Firmus may sharply cut valuation ahead of ASX listing
Australian AI datacentre company Firmus Technologies is reconsidering its near-$44bn valuation as investors hesitate. Its share offering could also be shelved.
The lofty valuation of Firmus Technologies, an Australian company building AI datacentres, is facing growing doubts just weeks before its planned debut on the ASX. Several sources told Guardian Australia that the company is cutting its valuation to win over cautious investors, and may even postpone its initial public offering (IPO).
On Thursday, Firmus abruptly pulled out of a scheduled appearance at a parliamentary inquiry into artificial intelligence. The move came amid hurried talks aimed at rescuing what had been billed as Australia's largest IPO in decades.
A rapid rise in value
Just over a year ago, Firmus was valued at under $2bn, based on stakes taken by Nvidia and others. Successive funding rounds lifted that from $1.85bn to $15bn about eight weeks ago, and then to almost $44bn only days ago. That figure is now being heavily unwound because of tepid support. Backers include Nvidia, Blackstone, Jane Street and Coatue.
One investment manager described the situation as "fanciful", noting that the business loses hundreds of millions of dollars while its valuation kept climbing.
Risks for investors
Firmus plans to build and run liquid-cooled "AI factories" filled with Nvidia chips. At present it has just two small operating sites, plus seven contracted and four planned facilities. Minotaur Capital co-founder Armina Rosenberg said about 97% of contracted revenue, including deals with Meta, OpenAI and Nvidia, sits on sites not yet built. Morningstar analyst Lochlan Halloway said sentiment around the company had reached the euphoric phase of a bubble framework, though he stressed this did not mean Firmus was empty hype.
The listing was planned for 23 October and would have been the largest IPO since Telstra in 1997. Investors were to be asked to pay $11 per share. That price will either be sharply reduced or the float withdrawn altogether. Firmus was contacted for comment.
