Aborting the mega-float is also on the table, with key investor Nvidia now central to its success.
Both the AFRand The Australian reported news of the potential trim overnight, citing market sources close to the deal.
The Australian’s Dataroom offered insight into the mad scramble to keep the ASX listing – originally the 2nd largest in ASX history after Telstra in 1997 – alive, saying “Firmus and its investment banking advisers are believed to be pulling the initial public offering plans, according to sources in the market, after lobbying Nvidia for more financial support overnight”, adding that the float’s advisers are also cutting their fees, and the valuation for Firmus may be as low as $30 billion, 31% less than the planned $43.7bn market cap at $11 a share.
As Startup Daily reported yesterday, outlining the how the proposed $7.1 billion raise would be spent, retail brokers taking bids from wholesale investors, were offering as little as a $5000 stake in Firmus.
The Oz reports that the brokers had “very light” interest, with offshore investors being lobbied to commit more to the IPO.
Firmus was due to appear before the federal parliament’s ongoing inquiry in AI today, but notified the joint committee on Wednesday afternoon that it was withdrawing, without providing a reason – although revelations overnight about the mega IPO hanging by a thread are a reasonable excuse.
The Fin reported that the company’s banking syndicate began discussions with major investors on Wednesday about reducing the price after overseas demand came in weaker than anticipated.
The original $11 offer implied an equity valuation of $43.7bn. That figure is nearly three times the Firmus valuation just two months ago, when Nvidia, Coatue, Blackstone and US quant trading firm Jane Street invested $2.85bn at a $15bn valuation to bankroll the company’s Australian AI data centre plan, Project Southgate. Even at $30bn it would be double the August valuation.
On Tuesday, it emerged that CDC and Firmus had dissolved their Southgate partnership less than a year after announcing it, with CDC founder Greg Boorer saying the two companies were “misaligned” on the project.
Firmus cofounder and co-CEO Oliver Curtis told Startup Daily this week that they “mutually agreed earlier this year” to part ways.
If the Firmus raise proceeds at $9 a share, would represent an 18.2% discount and put the market capitalisation at aroud $35.8bn. But it would also reduce the amount raised in the IPO, assuming the shares issued remains unchanged, by $1.3bn.
Earlier plans envisaged approximately US$3bn of the targeted US$5bn raise coming from existing strategic investors. That reporting helped fuel expectations the deal would be covered before Australian retail investors were approached.
A lower offer price would cut the paper value of existing shareholders’ stakes and could leave less cash for the company’s capital-intensive buildout.
Local investors in Firmus include Regal Partners, Wilson Asset Management, Paradice Investment Management, Ellerston Capital, Frazis Capital Partners and Rapital Capital. Local VCs have not participated.
At the moment, Firmus has just 46MW of capacity operating in Melbourne and Singapore – just 3% of its pledged ambitions – with plans to build another 865MW of capacity across five sites in Australia and Asia over the next two years at a capital cost of $51.71bn, including the $43 billion Batam project.
| Project | New compute capacity | Disclosed capital cost | Target operations |
|---|---|---|---|
| Launceston, Tasmania | 84MW | A$4.97bn (US$3.48bn) | Early 2027 |
| Wesley Vale, Tasmania | 23MW | A$1.29bn (US$900m) | 2027; development approval pending |
| Batam, Indonesia | 360MW | A$20.66bn (US$14.46bn) | Phased from early 2027 |
| KVTP, Kuala Lumpur | 192MW | A$11.97bn (US$8.38bn) | Phased completion from 2027 |
| SVTP, Kuala Lumpur | 206MW | A$12.83bn (US$8.98bn) | Completion during 2027–28 |
| Total | 865MW | A$51.71bn (US$36.20bn) |
As Startup Daily outlined, Firmus had planned to spend $3.46bn on servers and $929m for deployment infrastructure from its proposed $7.1bn raise, while 31% ($2.21bn), was for a “liquidity reserve and costs related to financing strategies”. $271m was earmarked as working capital.
The build costs don’t change, unless the company revises its plans. Finding the additional funds for the sites in Tasmania, Malaysia and Indonesia when investors are reticent to back the “AI factory” developer will add to the company’s challenges and its suggested $20.2bn in contracted revenue from the roll out.
What seemed like a Herculean push to create one of Australia’s biggest public companies in just 12 months – Firmus became a unicorn with a $1.85bn valuation when Nvidia invested in a $330m raise in September 2025 – is now starting to look more Icarian.
