Firmus, an artificial intelligence data centre company backed by Nvidia, has cancelled its plans for a significant stock market listing in Australia. The firm cited "recent market volatility and prevailing market conditions" as reasons for the decision, stating that going public would not serve the interests of the company or its shareholders.
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Initially, Firmus aimed to debut on the stock market with a valuation exceeding $30 billion (£22.65 billion). However, one investment firm revealed to the BBC that it opted out of participating in the initial public offering (IPO) due to concerns about Firmus's valuation.
The company announced intentions to seek capital from private markets and explore various public and private financing options, promising to update shareholders on developments. Firmus specializes in constructing and managing liquid-cooled data centres, referred to as "AI factories," serving clients such as OpenAI and Meta, and has operations across Australia, Singapore, and the broader Asia-Pacific region.
Its notable investors include Nvidia, Blackstone, and Jane Street, although Blackstone declined to provide comments when approached by the BBC. Nvidia and Jane Street were also contacted for their remarks on the matter.
The decision to withdraw from the stock market comes amid rising skepticism among investors and analysts regarding the substantial investments in AI, as long-term return prospects remain uncertain. UniSuper, a major Australian pension fund, was one of the institutional investors that opted not to invest in the IPO. John Pearce, UniSuper's chief investment officer, commented that while Firmus presents a compelling narrative, its valuation did not match that, and they were wary of the company accruing more debt for its growth plans.
He noted the disappointment over the potential missed opportunity for the Australian Securities Exchange, which could have benefited from a well-structured listing. Phillip Wool, chief research officer at Rayliant Investment Research, characterized the situation as a gauge of how much companies are willing to continue investing heavily in AI. He warned that investing in Firmus would involve backing a company still in its nascent stages, which would likely require significant borrowing, framing it as more of a gamble on a vision than a solid investment.
Australia has emerged as an appealing location for data centre investments, attributed to its plentiful clean energy sources, natural gas, and available land.