A Company Backed Out Two Weeks Before Its Listing
On the morning of Friday, October 9, an AI data center company, only two weeks short of listing on the Australian stock market, announced it was pulling its IPO. The name is Firmus.
The target was about US$5 billion, which would have been the second-largest listing in Australia since Telstra in 1997.
Nvidia, OpenAI, and Meta are all tied to the company, so how the AI industry took the news is the heart of this story. Let's follow the collapse, the industry's reaction, and what it means for the AI bubble, step by step.
What Kind of Company Was Firmus?
✦ Firmus at a Glance
Backed by Nvidia, tied to OpenAI and Meta
Firmus is not a US company; it was a company seeking to list on the Australian market. It started in 2019 with bitcoin mining and, from 2021, shifted step by step into AI data centers.
It builds liquid-cooled "AI factories" and rents out computing capacity on Nvidia GPUs.
It has an eight-year partnership with Nvidia. In an August strategic round of $2 billion, Nvidia joined as a follow-on investor, and Blackstone and Jane Street came in as new ones. It also announced plans for a 360MW campus in Batam, Indonesia.
Its customers include OpenAI, which announced a multi-year deal on September 8 for dedicated AI compute from two facilities in Malaysia, and Meta, which is to receive GPU capacity from its AI factories in Southeast Asia.
Five Times the Value in Six Months
✦ How the Value Grew
Company value at each stage
In April, a round led by Coatue that raised $505 million valued Firmus at about $5.5 billion. The $2 billion round in August pushed it above $10.5 billion, and the IPO price of A$11 implied an equity value of about $30.6 billion.
That is more than five times April and about three times the August round from two months earlier. Including debt, the enterprise value reached about $60 billion.
Why Did Investors Turn Away?
✦ Three Things That Broke the Deal
In the order they surfaced
The first trigger was a podcast remark by the CEO of CDC Data Centres, who said there were no plans to roll out 1.6GW of capacity with Firmus because Firmus had chosen to develop its own data centers.
Firmus said the project had been wound down by mutual agreement earlier this year and that current development plans and contracted customer capacity were not affected.
The second is the escrow terms. Reuters reported that investors pulled their orders once it became clear that existing investors could sell more than half of the shares from day one.
✦ Price Path to Withdrawal
Per-share IPO price in Australian dollars
The third is the price. The IPO price was repriced from A$11 to A$9 on Wednesday and down to A$5.50 on Thursday. A$5.50 is half the original price.
Investors still would not take it, and the board concluded that the current terms did not properly reflect the strength of the business and its long-term growth outlook, so the listing was pulled.
Firmus said it will raise money in private markets while looking at other public and private market options.
How Did the AI Industry Take It?
✦ AI Infrastructure Stocks, Day by Day
October 8 was before the announcement; October 9 was the first session after
First, the stocks. In the US session on October 8, before the withdrawal was announced, CoreWeave fell 7.77%, Nebius 7.35%, Oracle 5.48%, and IREN 7.70%, and Nvidia also dropped 2.94%.
No reports linked that decline to Firmus; reports on OpenAI's revenue and a broader pullback in AI stocks were cited instead.
On October 9, the first trading day after the withdrawal, CoreWeave rose 0.61%, Nebius 0.62%, and Oracle 4.21%. Nvidia slipped just 0.52%. In Australia, NextDC fell 2.12% on October 12.
✦ What Investors Said
Price and execution were the common thread
Investors' reactions focused on price. UniSuper CIO John Pearce said Firmus had a compelling story but not a compelling valuation, and that the current valuation was priced for flawless execution.
Joseph Koh of Blackwattle also pointed out that the price tag assumed near-flawless execution.
Oscar Oberg of Wilson Asset Management, an existing investor, expressed disappointment, saying that three days earlier it had all seemed to be going well and that the market had spoken.
Rob Talevski of Webull Australia said it did not mean Firmus's vision for where AI is going was wrong, only that better execution is needed.
Reuters Breakingviews framed it not as a collapse in AI demand but as investors rejecting the price demanded by a company with little track record that had lost a key partner. Fear of being fooled came ahead of the fear of missing out.
Where the Other Listings Stand
✦ Listings Still in Line
Where the other AI infrastructure IPOs stand
This was not the first brake on AI infrastructure listings. In late September, SoftBank's SB Energy postponed its Nasdaq roadshow. The target valuation was $50 billion, and investors reportedly offered lower values during premarketing.
Two large AI infrastructure listings have stalled within three weeks.
Lambda has pushed its IPO from 2026 to 2027, and the WSJ reported it is raising up to $4 billion at a $14.5 billion valuation.
DayOne, Firmus's partner in Batam, publicly filed its F-1 for a Nasdaq listing on October 5, with Morgan Stanley, JP Morgan, BofA, and Citi as underwriters. It looks like the next one in line to be tested.
Is This a Sign of an AI Bubble?
✦ Two Reads on the Withdrawal
Warning voices versus pushback
Warnings were already out there before this.
About a week before the withdrawal, Lochlan Halloway of Morningstar said Firmus's rise showed hallmarks of a boom phase, if not outright euphoria, and Kirit Hara of Merlon Capital Partners said there was no way to pay for hopes and dreams.
There is clear pushback too. Jun Bei Liu of Ten Cap called it an important reality check for the AI investment boom but said the move should not be read as the beginning of the end of the AI trade.
In BofA's September global fund manager survey, 79% of respondents expected no AI infrastructure spender to announce a spending cut this year.
Taken together, the picture is clear. Even after the withdrawal, the large AI infrastructure stocks did not swing much, and few respondents expected spending cuts. This is not a sign that AI demand has gone out.
What it confirmed is that no investor will pay a sky-high price up front for capacity that has not been built yet, for a company whose value grew fivefold in six months.
So the core of the AI bubble from here is not whether AI gets used, but how much to put on capacity that has not been built yet. The prices at which SB Energy, Lambda, and DayOne come to market will show the answer first.
This isn't investment advice. You know that, right? Let's protect our precious money ourselves.
Well then, shall we begin today's adventure?
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