Artificial intelligence (AI) data centre company Firmus has canceled its plans for what would have been one of Australia's largest stock market listings. The Nvidia-backed firm stated that the decision was made due to "recent market volatility and prevailing market conditions," indicating that going public would not be in the best interests of the company or its shareholders. Firmus had initially aimed for a stock market debut that would value the company at over $30 billion (£22.65 billion).
An investment firm informed the BBC that it opted not to participate in the initial public offering (IPO) due to concerns regarding Firmus's valuation. The company announced, "Firmus will now pursue capital from the private markets and consider alternative public and private market options. We will provide additional information to shareholders as those options progress."
Firmus specializes in building and operating liquid-cooled data centres, referred to as "AI factories," for clients such as OpenAI and Meta. The company operates in Australia, Singapore, and other regions in the Asia-Pacific.
Backers of Firmus include Nvidia and major investment firms Blackstone and Jane Street. Blackstone declined to comment when contacted by the BBC, and Nvidia and Jane Street have also been approached for comments.
The decision to withdraw from the stock market listing comes amid investor and analyst concerns regarding the substantial investments in AI and the uncertain prospects for long-term returns. UniSuper, one of Australia's largest pension funds, was among the institutional investors that chose not to participate in the IPO. UniSuper's chief investment officer, John Pearce, remarked, "We think that Firmus indeed has a compelling story. It just doesn't have a compelling valuation." He expressed concerns that Firmus may need to incur additional debt to finance its growth plans, stating, "It's disappointing. The [Australian Securities Exchange] needs new stories and this could have been one if it was correctly priced."
Australia has emerged as an attractive location for data centre investments, attributed to its abundant clean energy, natural gas supplies, and available land. OpenAI's CEO, Sam Altman, noted earlier this year that Australia could become a leader in the data centre industry if it chose to do so. Currently, there are over 160 data centres in Australia, with more planned, despite some public resistance due to concerns about environmental impacts and noise.
In September, Altman stated that OpenAI did not plan to go public this year, citing safety concerns regarding the technology. OpenAI and its competitor Anthropic have been considering significant stock market debuts that could value the firms at over $1 trillion each. AI-related stocks, including Nvidia and Oracle, experienced declines in US trading on Thursday following reports indicating that OpenAI's revenues were lower than previously anticipated.