AI Data Centre Firm Firmus Abandons Major Stock Market Listing
Citing market volatility, the Nvidia-backed company postpones its initial public offering valued at over $30 billion.
Firmus, an artificial intelligence (AI) data centre company backed by Nvidia, has withdrawn its plans for a stock market debut that was anticipated to be one of Australia's largest listings. The company attributed the decision to "recent market volatility and prevailing market conditions," stating that a public offering would not be in the best interest of the company or its shareholders.
The company had initially announced its intention for an initial public offering (IPO) that would have valued Firmus at over $30 billion. However, concerns over its valuation led at least one investment firm to decide against participating in the IPO. Firmus plans to seek capital from private markets and will explore other public and private market options, with further information to be provided to shareholders as these options develop.
Firmus specializes in building and operating liquid-cooled data centres, which it refers to as "AI factories." These facilities serve clients such as OpenAI and Meta and the company has operations across Australia, Singapore, and the wider Asia-Pacific region. Its investors include Nvidia, Blackstone, and Jane Street.
The decision to scrap the listing comes amidst growing investor and industry concerns about the substantial investments being made in AI, with questions remaining about the clarity of long-term returns. UniSuper, a major Australian pension fund, was among the institutional investors that opted out of the IPO. John Pearce, UniSuper's chief investment officer, indicated that while Firmus presented a compelling narrative, its valuation was not as convincing. Pearce also noted concerns about Firmus potentially increasing its debt to finance its expansion.
In a separate but related development, OpenAI CEO Sam Altman stated in September that his company would not pursue a stock market listing that year, citing safety concerns related to AI that made it an "ill-advised moment" to go public. Both OpenAI and its competitor Anthropic have been rumored to be considering significant stock market debuts that could value each firm at over $1 trillion.
Market activity for AI-related stocks has shown some recent fluctuations. Nvidia and Oracle experienced declines in U.S. trading following reports of lower-than-anticipated revenues from OpenAI.