Firmus cancels $44bn ASX listing as investor interest falters

Firmus planned to sell shares at $11 each (Australian dollars) and raise about $7bn, which would have valued the company at around $44bn. That price was almost three times what investors had put on it in a private funding round just two months earlier.

The pitch began to fall apart midweek. It became clear that the banks running the deal had badly overestimated demand, and talks turned to cutting the $11 price sharply. Rather than list at a lower value, the board pulled the offer completely.

A company spokesperson said going ahead was no longer in the best interests of Firmus or its shareholders. The company says it will now raise capital from private markets and look at other public and private options, and that it will update shareholders as those plans develop.

The main problem was the gap between the price and the business behind it. Firmus is still a startup with just two small operational sites, one in Melbourne and one in Singapore, and five more in development. Only 46 megawatts of its planned capacity was running, about 5% of the total. Larger listed rival NextDC has roughly a quarter of its capacity running.

The business model also worried some fund managers. Traditional datacentre companies mostly rent out space and power, and customers bring their own computers. Firmus buys and owns the Nvidia chips itself. Nvidia releases new chips every year, and older ones lose value quickly, so Firmus could be stuck with expensive equipment that ages fast. Firmus also carries a heavy debt load, which made buyers more nervous.

There were concerns, too, that early backers saw the float as their exit, with ordinary retail investors left holding the shares if the hype faded. Some fund managers said pulling the deal was a good outcome for exactly that reason.

The timing could hardly have been worse. In the same week, veteran operator CDC Data Centres ended Project Southgate, a deal touted at $73bn to build sovereign, renewable-powered AI infrastructure in Australia with Firmus. Nvidia had been named as its first customer.

Speaking to a parliamentary committee on AI, CDC’s chief strategy officer Jack Dan said Firmus’s business model had evolved away from its early focus on Australian sovereign AI. CDC, he said, is built around critical infrastructure with near-total availability, and the two companies’ missions had begun to diverge.

The fallout spread quickly. Shares in Maas Group, one of Firmus’s investors, fell more than 20% in a single day as the float wobbled.

For most people in the US, UK and Canada, Firmus is not a stock they could have bought. But the story still matters if you hold a pension, a retirement account or an index fund heavy in tech. A large share of today’s market gains rests on the belief that AI datacentres will keep growing and pay off. A failed float like this one shows big investors are starting to question the prices attached to that belief.

It also shows how tightly the AI economy is wired together. Nvidia supplies the chips, may soon own a bigger piece of the company buying them, and relies on the same customers, such as OpenAI and Meta, that everyone else is chasing. When suppliers fund their own customers, it gets harder to tell how much demand is natural and how much is being paid for.

The cooling mood is spreading. Singapore-based DayOne Data Centres, which is building a large Indonesian campus for Firmus, is reported to be considering delaying its own listing or halving its planned raise to $US2.5 billion until markets recover.

Several things have moved in the two weeks since:

• The regulator is asking questions. The Australian Securities and Investments Commission told a parliamentary committee on October 20 that it is making inquiries into the float in the usual course, but has not opened a formal investigation. Its focus is whether investors were given misleading or deceptive information.
• Nvidia may step in. Nvidia is reported to be negotiating to invest hundreds of millions of dollars in Firmus, which would make it both supplier and shareholder.
• A key contract is under pressure. Confidential documents seen by some investors show OpenAI can end its deal to lease two Firmus sites near Kuala Lumpur, due to start in September next year, if delivery is badly delayed. That raises the stakes for raising money quickly.

Firmus has big plans to fund. With Nvidia, it announced an AI campus in Batam, Indonesia, designed for up to 170,000 Nvidia GPUs (the chips that train and run AI models) across 360 megawatts, with work due to start in the first quarter of 2027. Firmus projects the site could earn $25 to $30 billion from cloud customers in the six years after it opens, though that is its own forecast, not booked income.