Australia's biggest AI listing collapses before launch
Firmus Technologies had been lined up to be the defining float of the AI infrastructure boom in Australia. The Nvidia-backed data centre operator planned to raise up to AU$7.9 billion (about US$5.5 billion) on the Australian Securities Exchange, at AU$11 a share — a listing that would have valued the company at roughly AU$43.9 billion (around US$30.6 billion) and made it the second-largest IPO in Australian history, behind only the Telstra float of 1997.
On Friday, the company pulled the plug. In a statement reported by the BBC, Firmus withdrew its ASX listing application, citing "recent market volatility and prevailing market conditions". The board said the terms on which the offer could proceed "would not appropriately reflect the strength of the company's business and long-term growth outlook", and concluded that proceeding "was not in the best interests of the company and its shareholders".
Cooling towers and backup generators on the roof of a data centre.
Data centre cooling infrastructure. Image: Rsparks3, CC0, via Wikimedia Commons.
Instead, Firmus said it "will now pursue capital from the private markets and consider alternative public and private market options". According to Australian press reports, the company has privately ruled out reviving the Australian float and is weighing a Nasdaq listing next year, as The Business Times reported.
The valuation investors could not swallow
The numbers tell the story of why the float failed. The AU$11 offer price implied an equity valuation of roughly US$30.6 billion — nearly triple the US$10.5 billion valuation Firmus achieved in a fundraising round at the start of August, just two months earlier. That round was backed by Nvidia, Coatue Management, Blackstone and Jane Street, with Nvidia owning about 7.2 per cent.
Fund managers were blunt. "Obviously they got a bit too greedy," Ron Shamgar, head of Australian equities at Tamim Asset Management, told Nikkei Asia. At 13 times earnings before interest and taxes on a two-to-three-year outlook, he said, the offer was "not necessarily cheap for essentially what is a startup that has a lot of execution risk".
One investment firm told the BBC it had decided not to take part in the IPO. UniSuper, one of Australia's largest pension funds, also passed: its investment chief John Pearce said the fund declined to invest directly because of the valuation, and expressed concern that Firmus would repeatedly need to raise more debt and equity to finance its expansion. As one investor put it to the BBC, the company was a compelling story but not a compelling valuation.
The numbers looked especially stretched against the physical reality. Firmus currently has just two data centres actually operating — in Melbourne and Singapore — with five more across Asia-Pacific in early stages of development. Much of the planned rollout that the AU$43.9 billion valuation was pricing in is, in the words of one analyst, yet to be built.
"AI factories" and the infrastructure arms race
Firmus is part of a new breed of companies that build and operate liquid-cooled data centres purpose-built for AI workloads — facilities the company calls "AI factories". Its modular sites use proprietary energy and cooling technology designed to handle the enormous power and heat demands of training and running large AI models.
The company grew out of humble origins: it was established in 2019 as a bitcoin mining operation before pivoting to AI infrastructure, riding a valuation escalator from US$1.85 billion in September 2025 to US$5.5 billion in April 2026 and US$10.5 billion in August, according to industry reporting. The scrapped IPO would have taken it to US$30.6 billion in a single further step.
That trajectory captures both the promise and the peril of the AI infrastructure trade. The world's biggest tech companies are spending hundreds of billions of dollars on the data centres, chips and power that AI requires — a boom that has carried names like Samsung to record profits on the back of AI chip demand. But the Firmus episode shows investors are starting to distinguish between the picks-and-shovels suppliers with proven cash flows and the developers selling a vision of capacity that does not yet exist.
A reality check, not a funeral
The timing deepened the unease. The withdrawal came as Nvidia and Oracle shares slipped in US trading on Thursday amid reports about OpenAI's spending and financing arrangements — a reminder that the AI trade's foundations are being re-examined even as its biggest names keep climbing.
Still, analysts cautioned against reading the Firmus collapse as a verdict on AI itself. "I think the Firmus situation represents an important reality check for the AI investment boom, but I wouldn't interpret it as the beginning of the end of the AI trade," Jun Bei Liu, co-founder of fund manager Ten Cap and a critic of the IPO, told Nikkei Asia. The message from fund managers was consistent: the problem was Firmus's price, not artificial intelligence.
There were also company-specific doubts. Before the withdrawal, Firmus and its advisers had reportedly considered shrinking the offer and cutting the share price from AU$11 to AU$8.25 — a cut that would still have left the valuation at roughly double the August figure. That such a discount was even discussed suggests demand was weaker than the bookrunners had hoped from the start.
What comes next for Firmus
The company is not short of options, at least in theory. Private markets have shown enormous appetite for AI infrastructure assets, and a Nasdaq listing would put Firmus in front of the deep pools of capital that fund the US AI giants. But the episode leaves scars: the next valuation it seeks, public or private, will be negotiated by investors who have seen what happened when the price got ahead of the story.
For Australia's market, the loss is tangible. Fund managers had hoped a Firmus listing would help diversify an index dominated by domestic banks and resource companies. Instead, the country's second-biggest IPO ever will remain a might-have-been — and a cautionary tale about what happens when market hype meets investor arithmetic.
The broader lesson extends well beyond Sydney. As the AI buildout moves from chipmakers with real earnings to infrastructure developers with real estate plans, the Firmus float was a test of how far public-market investors would follow the story. Capital is still moving for assets investors believe in — Paramount's $110bn takeover of Warner Bros was recently completed. The answer from the Firmus bookbuild, delivered on Friday, was: not this far, and not at this price.
For more on the AI economy, see our coverage of Samsung's record AI-driven profits and the Boots sale to the Weston family. London's own data-centre dilemmas are explored in our piece on Charlton Riverside, and all business coverage is on the Business page.
