Firmus Technologies has abandoned what would have been Australia’s largest company listing in decades, after investor demand for its AI datacentre business failed to materialise.
A Firmus spokesperson said the board concluded that proceeding with the offer was no longer in the best interests of the company and its shareholders.
“Firmus will now pursue capital from the private markets and consider alternative public and private market options,” the spokesperson said on Friday morning. “We will provide additional information to shareholders as those options progress.”
With an anticipated valuation of $44bn, Firmus had been expected to be the biggest listing on the Australian Securities Exchange since Telstra in 1997. The offer was priced at $11 a share.
The company faced mounting scepticism over that valuation and its forecast earnings, given it is at startup stage with only two small operational sites.
Firmus is backed by chip maker Nvidia and Wall Street firms Blackstone, Jane Street and Coatue. Its backers had expected to raise billions of dollars through a public float with the help of five brokers.
Because of the lack of demand, Firmus will now need to raise money from private investors to fund its plans to build liquid-cooled “AI factories” in Australia and across Asia.
The company’s pitch began to unravel midweek, when it became clear that its bankers had vastly overestimated demand in an effort to raise $7bn from investors ahead of a planned listing on the ASX on 23 October.
That prompted discussions about a heavy reduction to the proposed $11-a-share initial public offering, according to one investment manager briefed on the matter. The company ultimately chose to withdraw its application to list altogether.
Guardian Australia has previously reported growing concern that early Firmus investors intended to use retail investors buying into the float as their “exit strategy”, which would have left small investors exposed if enthusiasm faded.
The datacentre company’s difficulties have already affected other parts of the market. Shares in Firmus investor Maas Group fell more than 20% on Thursday.
The anticipated personal wealth of the founders — Oliver Curtis, his cousin Tim Rosenfield, and Curtis’s former brother-in-law Jonathan Levee — will also be substantially reduced.
Veteran datacentre firm CDC ended a deal this week that had been touted as worth $73bn and was known as Project Southgate. It was aimed at building sovereign, renewable-powered AI infrastructure and had named Nvidia as its first customer. The deal was first announced in October last year.
CDC’s chief strategy officer, Dr Jack Dan, told the federal parliament’s joint standing committee on AI on Friday that the arrangements began when Firmus’s focus was “a lot more on Australia and creating sovereign AI capability in Australia.”
“Their business model has then since evolved and probably the most blunt way of putting it is we have a very clear business model and a very clear mission for our company,” Dan said. “And when things start diverging significantly from that, we continue to follow our core mission.”
Dan said Firmus had a “very different approach to developing datacentres”, while CDC is “very much about critical infrastructure, very significant resilience … essentially 100% availability.”
“That comes with a certain degree of assurance, a certain degree of rigor and a certain degree of process, which probably was or could have been construed as being a little bit too heavy for a more commercial type development,” he said.
Earlier in the hearing, Dan noted that CDC had operated for nearly 20 years and that, until last year, “no one really cared who CDC datacentres was”, but datacentres were now front and centre of the national conversation.
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