Firmus Grid's would-be blockbuster IPO ran into a reality check when buyers balked at the A$11 figure, according to people familiar with the process. Just days after the company said indications of interest were running well ahead of the offer size - which those people said pointed toward a roughly $30 billion valuation - sentiment cooled.
Order books shut on Thursday, yet there was still no word on pricing or how the transaction would be structured. That unusual silence sparked chatter that the deal could be repriced or even pulled. JPMorgan Chase & Co., Bank of America Corp., Morgan Stanley and Morgans Financial Ltd. are running the offering. A Firmus representative did not respond to requests for comment.
Interviews with no fewer than 10 investors and advisers turned up recurring worries: a thin track record, a steep valuation, and the chance of heavy selling with about 58% of shares poised to trade freely from day one. They also pointed to rising regulatory scrutiny and tighter financing conditions for data centers.
UniSuper, one of Australia's largest pension funds, chose not to participate.
Maxence Visseau, who serves as Arkevium Capital's chief investment officer in Dubai, said, "Investors still believe in AI," and added, "What they won't do is pay any price for companies that spend huge amounts on data centers, depend on a few big customers, and promise profits years from now." Rayliant Global Advisors' portfolio-management chief, Phil Wool, noted, "Investors are increasingly on edge," and said, "Firmus was going to be one of the biggest Australian IPOs ever, so from that perspective, it registers as a historical fail."
A struggling IPO says more about appetite than a successful one does. Market Briefs covers new listings free every weekday.
As the IPO buzz grew earlier this year, the company drew tabloid attention tied to Curtis's criminal history and his partner, PR executive Roxy Jacenko.
Today it operates two data centers. A large portion of the proposed valuation hinges on constructing a pan-Asia network to serve clients including Meta Platforms Inc. and OpenAI, with IPO proceeds earmarked to support that build. Investor documents cite a 912 megawatt pipeline, 46 megawatts of which is already built, and note plans to develop AI factories powered by hardware from backer Nvidia.
In early August, Firmus carried a $10.5 billion valuation after a fundraising round that featured Jane Street and Blackstone Inc., meaning it was aiming to nearly triple that number in roughly two months. For the 2026 financial year, the company reported revenue of $51 million.
There are ripple effects too. Maas cited "significant market speculation and commentary" about whether the proposed IPO will proceed.
Investors globally are pressing on lofty targets and price tags around AI infrastructure. Last month, data center company Accelevation Holdings Corp. launched its US IPO at a price below the indicated range. South Korea's Kospi has fallen 27% from its June peak as excitement surrounding memory-chip leaders Samsung Electronics Co. and SK Hynix Inc. ebbed. Billionaire Ray Dalio, speaking this week, called AI a "classic bubble" and cautioned it may be near a breaking point as financing-related debt has swelled amid higher rates.
Building these facilities is also getting tougher. In late September, Oracle Corp. cited force majeure on its New Mexico data center project.
Even credit markets are reflecting the risk. KKR & Co. estimates that completing the global AI buildout will require $8 trillion, so the urgency to secure funding isn't abating. "I don't think it will be the last AI-related IPO to disappoint as enthusiasm for the theme crests and investors grapple with just how much future growth the last couple years' tsunami of issuance will require to make any financial sense," said Rayliant's Wool.
This episode shows how public investors are grading AI infrastructure stories in 2024 - more proof, less promise. When a business is asking for billions with limited operating history, concentrated customers and a large float available on day one, pricing has to fit the risk.
If you own data center builders, suppliers tied to their projects or funds that bankrolled recent raises, watch the items flagged here: what is built versus promised, how much fresh capital is required, and whether early trading could be heavy if existing holders sell. That will set the tone for how AI infrastructure names get valued in the months ahead.
How this prices will shape the whole data center listing queue. Join Market Briefs free and watch it.
