Nvidia Backed Firmus Grid’s IPO Demand Slumps, Raising Questions on AI Funding

Demand for the planned $5.5 billion listing of Australia’s Firmus Grid has dropped sharply, with the offering failing to draw enough support at the marketed price of A$11 per share, according to people familiar with the matter. Just days earlier, the Nvidia-backed data center firm said indications of interest were well above the offer size, putting it on track for a $30 billion valuation. Order books closed Thursday, yet Firmus has given no word on pricing or deal structure, fueling talk that the price could be cut or the IPO pulled altogether.

Investor Concerns Over AI Data Center Valuations

Based on conversations with at least 10 investors and advisers, worries include the company’s limited track record, rich valuation and the risk of a share flood, since about 58% of stock would be tradable from day one. Tighter data center financing and rising regulatory scrutiny also weighed. Firmus currently runs two data centers, and its valuation relies on building a wider Asian network for clients such as Meta Platforms and OpenAI. UniSuper, one of Australia’s biggest pension funds, is not taking part.

Rising Borrowing Costs and the AI Funding Boom

Maxence Visseau of Arkevium Capital said investors still believe in AI but won’t pay any price for firms that spend heavily, rely on a few big customers and promise profits years away. The episode points to growing concern over how much capital AI infrastructure companies want from public markets as borrowing costs climb.