- Nvidia-backed Firmus is reconsidering the terms of its planned Australian IPO after weaker-than-expected institutional demand raised fresh questions about valuations across the AI infrastructure market.
Firmus Technologies is facing a major test of investor appetite for artificial intelligence infrastructure after demand for its planned Australian IPO weakened during institutional bookbuilding. Reuters reported Oct. 8 that Firmus was considering cutting its offer price from A$11 to A$8.25 per share because of weaker-than-expected demand from overseas investors. The final IPO terms were still being negotiated.
The potential reduction would lower Firmus’ implied valuation from about A$44 billion to roughly A$33 billion. Reuters also reported that the company was considering reducing the amount raised from approximately A$7.9 billion to A$5.9 billion. The development comes only weeks after Firmus secured a $2 billion strategic equity investment involving NVIDIA Corp. (NASDAQ: NVDA), Blackstone Inc. (NYSE: BX), Coatue and Jane Street. The August financing valued the company at more than $10.5 billion on a post-money basis.
The change in IPO pricing therefore puts greater focus on how public investors are valuing AI infrastructure companies compared with private-market investors.
Why Firmus Is Cutting Its IPO Price
Firmus had been preparing what was expected to become Australia's second-largest IPO, behind Telstra's 1997 listing. The original A$11 offer price implied a valuation of about A$43.7 billion. That valuation had already attracted skepticism from some investors. Reuters reported earlier this month that Firmus' implied valuation had risen from $10.5 billion in early August to about $30.6 billion at the A$11 IPO price in a matter of weeks.
Some investors questioned whether the company could justify the valuation given its limited operating history and the amount of infrastructure still under development. The latest repricing highlights the challenge facing AI infrastructure companies: substantial customer commitments do not necessarily translate into immediate revenue or cash flow.
Firmus said in September that it had surpassed 900 megawatts of contracted capacity and added OpenAI as an anchor customer for two planned AI factory sites in Malaysia. Its broader portfolio includes seven AI factories across Australia, Singapore, Indonesia and Malaysia, with two operational and five under development.
The company has also announced strategic AI infrastructure agreements with Meta for GPU compute capacity at facilities in Southeast Asia. Those commitments provide evidence of customer demand, but Firmus still has to build and bring much of its planned capacity online.
Reuters noted that only about 42 megawatts of the company's targeted 1 gigawatt capacity was operational, leaving a substantial amount of the planned infrastructure dependent on future construction and deployment.
What the Firmus IPO Says About AI Funding
The Firmus IPO does not establish that demand for AI infrastructure is collapsing. Instead, the repricing indicates that investors may be becoming more selective about the valuations assigned to companies whose growth depends heavily on future data-center capacity.
Firmus has attracted considerable private capital. Its $2 billion strategic investment followed an earlier $505 million financing led by Coatue, according to the company's disclosures. NVIDIA has also become an important infrastructure partner. Firmus plans to build a 170,000-GPU AI factory campus with NVIDIA, part of its wider effort to expand computing capacity across the Asia-Pacific region.
Goldman Sachs expects the five largest US hyperscalers to spend about $1.2 trillion on AI infrastructure in 2027, up from roughly $800 billion expected for 2026. Private funding also remains substantial. Nscale, another Nvidia-backed AI infrastructure company, recently raised $3.36 billion in pre-IPO financing ahead of a proposed US listing.
Firmus is further along in the public-market process, making its reception particularly relevant. The company is expected to begin trading on the Australian Securities Exchange on Oct. 23, although the final offer price and size could change before the listing.
The outcome will provide another indication of whether public investors remain willing to finance AI infrastructure at aggressive valuations or are beginning to demand greater evidence of operating scale, revenue and cash generation.
For now, the Firmus episode points to a repricing of AI infrastructure risk rather than evidence that underlying demand for computing capacity has disappeared.