Key facts
- Firmus, an AI data center company backed by Nvidia, has scrapped its $5 billion Australian IPO.
- The company cited recent market volatility and prevailing market conditions for the decision.
- Firmus will now pursue capital from the private markets.
- The IPO would have been one of Australia's largest-ever stock market listings.
- The planned IPO implied an equity valuation of over $30 billion.
Firmus, an artificial intelligence data centre company backed by Nvidia, has withdrawn its plans for a $5 billion initial public offering in Australia, citing market volatility and lukewarm demand. The company stated that going public under current conditions would not be in the best interests of the company or its shareholders.
Firmus, which builds and operates liquid-cooled data centres, or "AI factories," for clients including OpenAI and Meta, had initially announced plans for a stock market debut that valued the company at more than $30 billion. One investment firm told the BBC that it had decided not to take part in the IPO over concerns about its valuation.
UniSuper, one of Australia's largest pension funds, was among the institutional investors that decided not to participate. "We think that Firmus indeed has a compelling story. It just doesn't have a compelling valuation," UniSuper's chief investment officer John Pearce said, adding concerns about Firmus's debt levels. "It's disappointing. The [Australian Securities Exchange] needs new stories and this could have been one if it was correctly priced," Pearce told the BBC.
Firmus will now pursue capital from the private markets and consider alternative public and private market options. The decision comes as investors and analysts raise concerns about the vast sums being invested in AI and the uncertainty surrounding long-term returns.