Firmus, the Nvidia-backed AI data-centre operator, shelved its planned initial public offering on Friday, Reuters and iTnews reported. At about $5 billion it would have been the second-largest sale of new shares in Australian history, but demand was lukewarm. Firmus said its board concluded that proceeding was not in the best interests of the company and its shareholders, and that it would pursue private capital and consider other public and private options. The shares were to be offered at
It was the local test of whether investors will fund the AI build-out at the prices on offer. A private raise keeps the project alive but removes the public price signal, and it makes other planned AI listings harder.
Many super funds would have held some Firmus shares after listing, so nothing changes for your balance. The effect is indirect: weaker appetite for AI floats can weigh on the broader sharemarket and on fundraising by other companies.
The board was right to walk away instead of selling at a price that the market judged too high.
Walking away after weeks of marketing shows how fragile the AI trade is, and it leaves Firmus dependent on private lenders and investors.
Watch for a statement from Firmus on who is funding it and at what valuation. A private round far below $30.6 billion would confirm that the float failed on price. A Nasdaq listing is reported by one source only, and we are not treating it as fact.
Reuters · CNA · Bloomberg Television (Oct. 8–9) · iTnews (Oct. 9) · AFR · ABC News · The Guardian (earlier reports, Oct. 7–8) · Valuation currency and Nasdaq plan not confirmed
Firmus scraps its $5 billion float as buyers balk, citing market volatility. Australia's biggest AI test goes private
The Nvidia-backed data-centre operator will look to private investors after buyers balked at the asking price. The ASX is shut today, and Wall Street's Friday session was still trading as we went to press.
Firmus, the Nvidia-backed operator of AI data centres, shelved its initial public offering on Friday, Reuters and iTnews reported. The sale, worth about $5 billion, would have been the second-largest in Australian history, but it had struggled to find buyers. According to the reports, Firmus said its board concluded that going ahead was not in the best interests of the company and its shareholders, and that it would turn to private investors while keeping other public and private options open. Channel NewsAsia said the failure dealt a blow to a share market that is already shrinking.
The price was the problem. Firmus had planned to sell shares at $11, which Reuters-based reports said gave it a valuation of $30.6 billion, almost three times the $10.5 billion it was worth in a fundraising in early August. iTnews gave the valuation in US dollars, so we have not confirmed the currency. The AFR said earlier this week that dilution clauses were driving price talks, and reports the same week put a cut price of $8.25 on the table. One portfolio manager quoted in the coverage said investors were being asked to pay a very large sum for results that depended on near-flawless execution. Firmus runs two leased data centres, in Melbourne and Singapore, and plans five more across Asia and the Pacific.
The timing was awkward. On Thursday the S&P 500 fell 0.47 per cent to 7,765.36 and the Nasdaq lost 1.25 per cent, on worries about AI spending and a 10-year yield of 5.231 per cent. Pimco's Ivascyn told the Financial Times that the yield could reach 6 per cent for the first time since 2000, according to Reuters; we have not seen a second outlet quote him. Wall Street was still trading on Friday as we went to press, so we have no final figures. Bloomberg and Reuters both said futures pointed to a rebound as oil slipped and fears of an AI bubble eased.
At home, the S&P/ASX 200 closed on Friday at 8,716.6, up 0.64 per cent, and the Australian dollar was near 69.7 US cents early on Saturday. The exchange is shut today and reopens on Monday. With oil near US$100 a barrel, inflation and the Reserve Bank's November 3 meeting remain the backdrop for any company asking investors for money.
For investors, the lesson is narrower than the headlines. A failed float is a verdict on a price, not proof that data centres will not be built. The next questions are who funds Firmus privately, at what valuation, and whether other AI-linked companies hoping to list in Australia will have to cut their asking prices too. A report that Firmus is eyeing a Nasdaq listing after the private round comes from one source, and the company has not said so.