Firmus, an Australian AI data center operator backed by Nvidia, has canceled its planned initial public offering (IPO) due to current market volatility. The company had intended to raise $5 billion, pricing shares at A$11 each, which would have valued it at approximately $30.6 billion, making it Australia's second-largest share sale.
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The decision to withdraw from the IPO came after Firmus’s board assessed that the terms did not accurately reflect the company's business strength. The firm will now pursue private-market funding and explore additional options.
Firmus's backers include Nvidia, Coatue Management, Blackstone, and Jane Street. Recently, Firmus concluded a $2 billion funding round in August, raising over $3 billion in equity over the past year, with its valuation then estimated at over $10.5 billion.
In September, Firmus entered into agreements with Meta to provide GPU computing capacity in Southeast Asia using Nvidia’s DSX platform.
While the cancellation of the IPO highlights some uncertainty in the market, Firmus maintains a robust growth outlook and plans to continue securing funding. For Nvidia, the impact of Firmus's decision appears limited, as the company is among multiple neocloud partners purchasing Nvidia chips. Nvidia's core business remains strong; its Q2 revenue reached $96 billion, with data center sales at $89 billion. The company projects Q3 revenue of $108 billion and anticipates about 70% growth by fiscal 2028, attributing supply constraints as the primary limitation rather than demand.
However, rising memory costs could affect margins, with Nvidia expecting a gross margin of 74% in Q3, declining to 71%-72% in Q4. In Q2, Nvidia returned a record $26 billion to shareholders, including $20 billion in buybacks and $6 billion in dividends.
Despite the Firmus news being a setback for one partner, Nvidia’s demand outlook remains unchanged. Investors are now closely observing how other neocloud partners navigate fundraising in this climate.