Firmus scraps $30bn IPO as AI valuation doubts spook investors

Firmus, an Nvidia-backed data centre operator, has scrapped plans for a stock market listing that would have valued the company at more than $30bn (£22.65bn) — what would have been one of the biggest debuts in Australian market history.

The company blamed "recent market volatility and prevailing market conditions" and said a public listing would not serve the company or its shareholders. It will now raise capital privately and weigh "alternative public and private market options," according to a company statement.

What went wrong with the deal?

At least one large investor walked away before the listing collapsed. UniSuper, one of Australia's biggest pension funds, decided not to take part in the initial public offering. Its chief investment officer, John Pearce, put the problem in one line:

"We think that Firmus indeed has a compelling story. It just doesn't have a compelling valuation."

Pearce told the BBC that UniSuper also worried Firmus would need to borrow heavily to fund its growth plans. He saw missed upside for the Australian Securities Exchange, not just for the company.

"It's disappointing. The [Australian Securities Exchange] needs new stories and this could have been one if it was correctly priced."

How big is the valuation gap?

Firmus builds and runs liquid-cooled data centres, which it calls "AI factories," for clients including OpenAI and Meta. It operates in Australia, Singapore and other parts of the Asia-Pacific. Its backers include Nvidia, Blackstone and Jane Street. Blackstone declined to comment; the BBC has contacted Nvidia and Jane Street.

Phillip Wool, chief research officer at Rayliant Investment Research, framed the deal as a stress test for AI capital. This kind of listing, he said, tests how willing companies are to keep "ploughing money" into AI. Investors would have bought an early-stage company that still needs to borrow large sums.

"It's more like a bet on a dream."

Why does the pullback matter now?

The scrapped listing lands amid rising unease. Investors and analysts have questioned the hundreds of billions of dollars flowing into AI while long-term returns stay unclear. The pressure is not theoretical: Nvidia and Oracle shares fell in US trading on Thursday after reports that OpenAI's revenues were lower than previously thought.

OpenAI itself has signalled caution. Chief executive Sam Altman said in September that OpenAI did not aim to list this year, calling safety concerns an "ill-advised moment" to go public. OpenAI and rival Anthropic have nonetheless been eyeing debuts that would value each firm above $1tn.

Is Australia's data centre boom still intact?

Australia holds clear advantages for the sector. The country offers abundant clean energy, natural gas supplies and available land. Altman said earlier this year that Australia could become a world leader in the data centre industry if it chose to. More than 160 data centres already operate there, with plans for more.

Local resistance is growing, though. Some Australians have raised concerns about the facilities' environmental impact and noise.

The Firmus withdrawal shows the boom now faces a harder test: pricing. Private capital remains willing to fund AI infrastructure, but public-market investors are starting to demand evidence that the sums add up — and the next mega-listing, whenever OpenAI or Anthropic attempts it, will face the same arithmetic.