Firmus’s $44 billion valuation faces a reset before its ASX listing

A valuation that moved faster than the business

Investors were still working with a valuation near $44 billion just days ago. Now they are urgently revisiting the price to find a level buyers will accept.

A year ago, Nvidia and other investors valued Firmus at less than $2 billion when they bought stakes in the company. Successive funding rounds, many involving the same key investors, lifted that figure from $1.85 billion to $15 billion about eight weeks ago, before it approached $44 billion.

One investment manager familiar with the listing called the situation detached from reality, saying Firmus was losing hundreds of millions of dollars while its valuation kept rising every few months.

Firmus has attracted major investors, including Nvidia and US investment firms Blackstone, Jane Street and Coatue. Its business is built around the growth in AI spending: it builds and operates “AI factories” equipped with Nvidia GPUs and liquid cooling.

Most of the contracted revenue is still ahead

The company has contracts with Meta, OpenAI and Nvidia. But it has only two small operating sites, with seven more covered by contracts and four at the planning stage.

Minotaur Capital co-founder Armina Rosenberg said about 97% of Firmus’s contracted revenue comes from sites that have not yet been built. She said the company could get close to its proposed listing price only if construction, financing and contract renewals all go to plan.

That leaves investors weighing more than demand for AI infrastructure. Firmus’s valuation and expected future revenue depend on building planned sites quickly, even as local communities protest against projects of this kind. Its focus on Asia may help it avoid growing opposition to data centres in Australia and the US, but Rosenberg said it brings other obstacles, including power constraints and construction timelines.

The exposure is bigger than one listing

Firmus’s valuation also assumes that hyperscalers such as Microsoft, Google and Meta will keep spending heavily on AI. If that spending slows, independent data-centre operators could be among the first to feel the effects.

Morningstar analyst Lachlan Holloway applied economist Charles P. Kindleberger’s five-stage bubble model — displacement, boom, euphoria, crisis and revulsion — and judged market sentiment around Firmus to have reached the euphoria stage. He cautioned that this did not mean Firmus was empty hype; the risk was that investors might pay too much for it.

I think that distinction matters. The company has contracts and operating sites, but the valuation depends heavily on infrastructure that does not yet exist. The key unknown is how much of the proposed price buyers will accept before construction, financing and renewals have proved themselves.

Firmus planned to list on the ASX on October 23. The offering could have been Australia’s largest since Telstra’s 1997 IPO, but is now in doubt. Shares were to be offered at $11 each; the price could be sharply reduced, lowering the company’s valuation, or the listing could be cancelled.