Nvidia-backed AI data centre firm scraps mega stock market listing
Quick Look
- Firmus, an AI data centre company backed by Nvidia, has cancelled its planned Australian stock market listing that would have valued the firm at over $30bn, citing recent market volatility and unfavourable conditions.
- The company will now pursue private capital and alternative options, as institutional investors like UniSuper expressed concerns over its valuation and potential debt burden.
AI-generated summary
Why It Matters
Firmus had announced plans for a major Australian IPO valued at over $30bn, backed by Nvidia and major investment firms, positioning itself as a builder of liquid-cooled AI data centres for clients like OpenAI and Meta.
Artificial intelligence (AI) data centre company Firmus has scrapped its plans for what would have been one of Australia's biggest-ever stock market listings.
The Nvidia-backed firm said it had made the decision due to "recent market volatility and prevailing market conditions" and that going public would not be in the company or shareholders' best interests.
Firmus had initially announced plans for a stock market debut that valued the company at more than $30bn (£22.65bn).
One investment firm told the BBC that it had decided not take part in the initial public offering (IPO) over concerns about its valuation.
"Firmus will now pursue capital from the private markets and consider alternative public and private market options. We will provide additional information to shareholders as those options progress," the company said.
Firmus builds and operates liquid-cooled data centres, or what it calls "AI factories", for clients including OpenAI and Meta.
It has operations in Australia, Singapore and other parts of the Asia-Pacific region.
The company's backers include Nvidia and major investment firms Blackstone and Jane Street.
Blackstone declined to comment when contacted by the BBC.
Nvidia and Jane Street have also been contacted for comment.
The decision by Firmus to scrap its stock market listing comes as investors and industry analysts have raised concerns about the hundreds of billions of dollars being poured into AI as the prospects for long-term returns remain unclear.
UniSuper, one of Australia's biggest pension funds, was among the institutional investors that decided not take part in the IPO.
"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 in an update to investors.
He also said UniSuper was concerned that Firmus would have to go further into debt to fund its growth plans.
"It's disappointing. The ASX needs new stories and this could have been one if it was correctly priced," Pearce told the BBC.
In September, OpenAI chief executive Sam Altman said his company did not aim to list on the stock market this year, citing concerns over the technology's safety that make it "an ill-advised moment" to go public.
The ChatGPT-maker, along with rival Anthropic, have been eyeing blockbuster stock market debuts that would value the firms at more than $1tn each.
AI-related stocks, Nvidia and Oracle, fell in US trading on Thursday after reports that OpenAI's revenues were lower than previously thought.
What to Watch
AI outlook — possibilities, not facts
Firmus will secure alternative funding through private markets to continue its AI data centre expansion
Likely · Within months
Investor caution toward high-valued AI IPOs will persist in the near term
Likely · Within months
Open Questions
- What specific private market options will Firmus pursue?
- How will the cancellation affect Firmus's growth and expansion plans?
- Will other AI infrastructure companies reconsider their IPO plans due to similar market concerns?
