Nvidia-Backed Firmus IPO Collapses as AI Valuation Concerns Grow

Australian data center company Fermosis is postponing its plan to IPO. The listing would have been the second largest ever in Australia, valuing the company of more than $30 billion. But it all came undone as investors started getting nervous for so many reasons. First, there was the price. $11 per share for a company that runs two data centers and generated $50 million last financial year. The rich valuation was based on aggressive buildout plans supported by Nvidia, which was simultaneously a customer and a supplier and an investor. Then there were concerns existing investors could flood the market after listing with 58% of shares free to trade from day one. And then there's the technology. Furnace made impressive claims around its power usage effectiveness right on the boundary of what is physically possible without ever proving it. And then there's the co-CEO and founder Oliver Curtis. He served prison time for insider trading in 2016. He since been cleared to run a company, but standing in front of the opaque firm backdrop, his history stood out even more sharply. The timing of the IPO also came as the broader mood around data center construction starts to shift. Bay & Company estimates the AI industry as a whole will need to generate $6 trillion to justify the current spending. Billionaire investor Ray Dalio, meanwhile, describes AI as a classic bubble. Furma says it now plans to tap private markets for the capital it needs to fund its ambitions.