Nvidia-backed Firmus scraps $5bn Australian IPO on weak demand

Australia's Firmus, an AI-focused data center operator backed by Nvidia, has abandoned its $5 billion initial public offering due to weak investor demand. The company cited market volatility and terms that did not accurately reflect its business and growth prospects as reasons for shelving the IPO, which would have been the second-largest new share sale in Australia's history.

Firmus initially planned to sell its shares at 11 Australian dollars each, aiming for an equity valuation of $30.6 billion, nearly triple its $10.5 billion valuation following a fundraising round in August. The company, which designs and operates modular AI factories using proprietary energy and cooling technology, currently operates in Melbourne and Singapore with five more projects planned across the Asia-Pacific region.

Firmus has about $30 billion in debt, making the enterprise value about $60 billion if the IPO had proceeded. Despite the AI boom driving global markets, investors remain cautious, particularly regarding the valuation, execution, and debt levels of AI-focused companies like Firmus.