Through a partnership with Nvidia, Firmus is deploying its chips in facilities it calls "AI Factories." (Source photos by Getty and Ken Kobayashi)October 9, 2026 09:03 JSTUpdated on October 9, 2026 15:50 JSTCANBERRA -- Australian AI-focused data center developer Firmus has pulled the plug on its Sydney IPO amid criticism that the company became "greedy" and pursued a "mind-boggling" valuation. The company, which counts chip giant Nvidia as a backer, announced on Friday it had decided to withdraw its application to list on the Australian Securities Exchange, citing "recent market volatility and prevailing market conditions"."The Board determined that the terms on which the Offer could proceed would not appropriately reflect the strength of the Company's business and long-term growth outlook," it said in a statement. Firmus aimed to raise up to $7.9 billion Australian dollars ($5.5 billion), setting its offer at AU$11 per share, which would have resulted in a market valuation of AU$43.9 billion ($30.7 billion), making it the second-largest Australian IPO after the listing of government telecommunications giant Telstra in 1997. Fund managers and analysts expressed disappointment that Firmus would not list on the ASX and contribute to diversifying an index heavy with domestic banks and resource companies. However, the offer was overpriced, they said, particularly given much of the planned data center rollout in Australia and Southeast Asia was yet to be built."Obviously they got a bit too greedy," said Ron Shamgar, head of Australian equities at Tamim Asset Management. "The valuation was quite excessive if you compare it to other neo-clouds out there. On a two- to three-year outlook, it was offered at 13 times [earnings before interest and taxes], which isn't necessarily cheap for essentially what is a startup that has a lot of execution risk."Founded in 2019, Firmus currently operates two data centers in Australia and Singapore, and has five in development across Australia, Singapore, Indonesia and Malaysia. Through a partnership with Nvidia, Firmus is deploying its chips in facilities it calls "AI Factories," integrating the Nvidia Vera Rubin NVL72 rack-scale systems with Firmus' own liquid-cooling system, and leasing the processing capacity to customers including OpenAI and Meta. Firmus has undertaken several equity raises over the past year, bringing in more than $3 billion and valuing the company at over $10.5 billion. Nvidia has participated in the fundraising, along with tech investor Coatue and private equity giant Blackstone, which in February extended $10 billion in debt financing. Firmus said in a draft prospectus that it would generate $5 billion in annual earnings within five years from its data center portfolio. John Athanasiou, chief executive of Red Leaf Securities, a Sydney-based boutique stockbroker and corporate adviser, said the gap between the company's valuation based on its private fund raises and its IPO offer was "mind-boggling"."An evaluation of [AU]$44 billion is astronomical," he said. "You've got to leave investors with some upside, otherwise they won't participate."In its statement, Firmus said it would now "pursue capital from the private markets and consider alternative public and private market options." Sources have told the Australian Financial Review that it is now looking to list on the Nasdaq exchange in the U. S. Athanasiou said the company faced a tough path ahead."This will definitely make life harder on them," he said. "This has made global financial news, so their capacity to raise the funds required to meet their ambition is far more difficult now."Shamgar said continuing to raise money privately also had consequences from large investors' preferential arrangements"If they raise money privately, I think you'll see the smaller and previous shareholders get diluted even more," he said. On Friday, trading in shares of Maas Group Holdings (MGH), a construction services company working on Firmus projects, was halted after the stock dropped almost 30%, amid reports that the IPO was in trouble. Maas, which holds a 3.2% stake in Firmus, then released a statement saying it continued to deliver on previously announced contracts with the data center developer, with work orders totaling about AU$1.1 billion over fiscal 2026 and 2027."MGH has received payments totaling [AU]$373 million against these work orders," it stated. "MGH currently anticipates these work orders to be completed by the end of CY27," referring to calendar year 2027. Armina Rosenberg, co-founder of Minotaur Capital, said she expected Firmus to prioritize its Asian sites, given contracts with OpenAI and Meta, while slowing its uncontracted Australian pipeline."The offer was too rich for a company with 46 megawatts built out of 912 MW contracted," Rosenberg said."Almost all the contracted revenue sits on sites that don't exist yet. Most of the debt for the Asian sites wasn't committed."Bowen Hosking, an equity analyst at Enhanced Asset Management, said that while the IPO's failure was attributable to Firmus - particularly its "enormous valuation" -- it highlighted "growing selectivity among investors towards AI infrastructure opportunities.""In my view, the market hasn't lost confidence in AI infrastructure," he said. "It has simply demonstrated that investors are no longer prepared to overlook valuation discipline because a company has exposure to AI or the backing of a prominent technology investor."