TLDR
- Nvidia-backed Firmus Grid pulled its planned $5 billion IPO in Australia on Friday.
- The deal would have been Australia’s largest IPO in almost 30 years.
- Firmus sought a $30 billion valuation, nearly triple its value from two months earlier.
- A key data center partner, CDC Data Centres, said its joint project with Firmus was no longer moving forward.
- Firmus plans to raise money through a private funding round instead, possibly followed by a Nasdaq listing.
Firmus Grid, an Australian data center company backed by Nvidia, has scrapped its plan to go public. The company pulled its $5 billion initial public offering on Friday.
Firmus abandoned its attempt at one of Australia’s biggest-ever initial public offerings, after the Nvidia-backed data center company failed to lure global investors who’ve grown increasingly skittish over frothy AI valuations: https://t.co/7oQV0XBdDg pic.twitter.com/aL47mo8Vmx
— Bloomberg (@business) October 9, 2026
The IPO would have been the largest share sale in Australia in close to 30 years. It also would have been the fourth-largest public offering in the world this year.
Instead of listing shares, Firmus said it will look for private funding. A person familiar with the matter said a Nasdaq listing could follow later.
Firmus did not respond to requests for comment on those plans.
Why Investors Pulled Back
Firmus wanted to sell shares at a price that valued the company near $30 billion. That number was nearly three times higher than the $10.5 billion valuation it had just two months earlier.
Investors said the asking price was too high. Firmus runs only two operational data centers right now, located in Melbourne and Singapore.
The company plans to build five more facilities across Asia-Pacific. But it has little track record in actually constructing AI data centers.
John Pearce, chief investment officer at Unisuper, said Firmus has a good business story. He said it simply did not have a valuation that matched it.
Unisuper chose not to buy shares in the IPO.
A separate issue added to investor doubts this week. CDC Data Centres CEO Greg Boorer said on a podcast that a planned 1.6 gigawatt data center project with Firmus was no longer happening.
That project had been valued at about 73 billion Australian dollars.
Investors also learned that more than half of Firmus stock could be sold by existing shareholders starting on day one of trading. That raised concerns about how the stock would perform early on.
Firmus Carries Heavy Debt
Firmus has about $30 billion in debt, according to analysts tied to the deal’s lead banks. That debt level would have given the company an enterprise value of $60 billion.
Bond yields have risen this year. That makes borrowing more expensive and puts pressure on companies with large debt loads.
My Bui, an economist at AMP, said investors are demanding more compensation for risk right now. She said that puts a limit on how high valuations can climb.
Firmus was founded in 2019. It designs AI data centers using its own cooling and energy technology.
Nvidia holds an equity stake in Firmus. Nvidia is also a customer and hardware supplier to the company.
Other backers include Coatue Management, Blackstone, and Jane Street.
Bloomberg reported Firmus may try to raise up to $3 billion from its current investors through the private round.
The IPO bookbuilding was led by Bank of America, JPMorgan, Morgan Stanley, and Australian broker Morgans.
Wider Market Reaction
The pulled IPO comes about a month before Anthropic’s planned IPO, which could raise up to $100 billion.
US-listed chipmaker stocks fell 3.4% on Thursday. That followed reports that OpenAI’s September revenue came in lower than it had earlier signaled to investors.
CoreWeave, a similar cloud computing firm, saw its shares drop nearly 8% on Thursday. CoreWeave operates 51 data center facilities and has a market value of $37 billion.
Jun Bei Liu, co-founder of fund manager Ten Cap, said the Firmus situation is a reality check for AI-related investments. She said it is not a sign that interest in AI stocks is ending.
Toby Hearst, an investment strategist at Yardeni Research, said demand for computing power still outpaces supply. He said that should keep business flowing to companies that lease out computing capacity.
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