The momentum behind Firmus Technologies’ high-flying valuation is showing severe cracks just weeks out from its anticipated ASX debut, casting doubt on what was billed as the largest initial public offering (IPO) in Australia in decades.
Multiple sources familiar with the matter have revealed that the AI datacentre company is currently scrambling to slash its valuation to entice skeptical investors. There is growing speculation that the company may even shelve the listing altogether as it struggles to reconcile its rapid growth story with market realities.
The turmoil intensified on Thursday when Firmus abruptly withdrew from a scheduled appearance at a federal parliamentary inquiry into artificial intelligence. The move came amid frantic, behind-the-scenes discussions aimed at salvaging the float, which had been set for October 23.
The central source of the crisis is the company’s near-$44bn valuation—a figure analysts describe as “fanciful” for a start-up. Just over a year ago, the company was valued at less than $2bn by backers including Nvidia, Blackstone, Jane Street, and Coatue. That figure surged to $15bn just eight weeks ago, before a final, aggressive push brought it to $44bn. That valuation is now being heavily unwound due to tepid investor appetite.
“The whole thing was getting fanciful,” one investment manager involved in the process said. “It’s a business that’s losing hundreds of millions of dollars, and yet its valuation kept going up nonstop every couple of months.”
Firmus’s business model centers on building liquid-cooled “AI factories” packed with high-end Nvidia GPUs. While the company has secured high-profile contracts with industry giants like Meta and OpenAI, critics point to significant operational hurdles. According to Minotaur Capital co-founder Armina Rosenberg, roughly 97% of the firm’s contracted revenue relies on facilities that have not yet been built.
“You only get near the offer price if delivery, financing and renewals all go to plan,” Rosenberg noted.
The company’s growth plan hinges on the rapid construction of its pipeline at a time when public backlash against datacentre developments is mounting globally. Furthermore, as Morningstar analyst Lochlan Halloway observed, market sentiment surrounding Firmus appears to have reached the “euphoria” stage of a classic speculative bubble. Halloway warned that the primary risk to investors is not necessarily the future of AI, but rather the massive premium they are being asked to pay for a company facing significant infrastructure and power constraints.
With the scheduled listing date looming, Firmus faces a binary outcome: it must either radically reduce its $11-per-share asking price, or pull the plug on the IPO entirely. Representatives for Firmus were contacted for comment, but have not provided a statement. If the float proceeds, it would mark the most significant test of investor confidence in the Australian tech sector since the 1997 Telstra IPO.
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