Berlin. Australian data center company Firmus Grid has canceled one of the largest initial public offerings in Australian history. The Nvidia-backed company failed to convince international investors who have become increasingly cautious in the face of high AI valuations.
For Firmus, the cancellation represents a dramatic turnaround. Just a few days ago, the company had signaled solid demand ahead of the IPO, which would have valued Firmus at $30 billion (26.7 billion euros). Less than three months ago it was $10.5 billion. The failure clearly shows investor resistance to financing conditions in the AI sector, which some believe have become too generous. At the same time, financing costs are rising worldwide, while the long-term returns of AI remain uncertain.
Firmus, whose business model relies on a steady inflow of new capital, will withdraw its application for a listing on the Australian Securities Exchange and explore other funding options. That's according to a statement on Friday that confirmed an earlier report by Bloomberg News.
"After considering recent market volatility and prevailing market conditions, the board concluded that the terms on which the offering could be made would not reflect the strength of the company's business and its long-term growth prospects," it said.
Shortly after the books opened to institutional investors this week, the IPO ran into trouble. Investors came to very conflicting assessments. Some saw Firmus well-positioned to benefit from the artificial intelligence boom. Others worried about valuation and that existing shareholders might flood the market with shares soon after the stock market debut. Another difficulty was convincing potential investors of the sharp increase in market value of a company with no proven track record that had sales of $51 million in fiscal 2026.
Firmus wanted to raise up to $5.5 billion, including a greenshoe option, and now needs to find other financing options to keep its ambitious expansion plans on track. The company wants to build data centers with hardware from the lender Nvidia, which it describes as AI factories. According to investor documents seen by Bloomberg, the project pipeline includes 912 megawatts, of which only 46 MW have been built so far.
“Investors simply weren’t willing to pay a sky-high price upfront for capacity that is largely still on the drawing board,” said Josh Gilbert, senior analyst for APAC and the Middle East at eToro. “The timing hasn’t helped either: Higher yields drive up financing costs and reduce the amount investors are willing to pay today for returns that won’t accrue until years later.”
The company said it would now raise capital on the private markets and explore alternative opportunities in public and private markets. In the longer term, Firmus will also explore a possible listing in the United States, people familiar with the matter said.
Many AI companies are looking for a suitable window for their IPOs as investors wait for frontier AI lab Anthropic's potential mega-IPO, which could happen as early as November, according to people familiar with the matter.
Firmus launched in Australia in 2019 as a Bitcoin mining company and has benefited from the surge in demand for AI infrastructure in Asia. The company has a pipeline of data center projects in Australia and Singapore.
The proceeds from the IPO would have financed the purchase of graphics processors for Firmus' first data center project in Batam, Indonesia. The project, developed together with DayOne, is part of an eight-year partnership with Nvidia.
