sharesShare articleThe biggest listing on the Australian sharemarket since Telstra went public last century appears to be hanging in the balance, as local AI giant Firmus reportedly scrambles for support from would-be investors.The company had been expected to list on the ASX in just two weeks, on October 23, and price its shares at $11 each.Firmus co-chief executives Tim Rosenfield and Oliver Curtis. After initial excitement, the company’s IPO has reportedly run into trouble. FirmusAdvertisementThat would raise about $7 billion for the firm and value it at just shy of $44 billion – the biggest price tag for an Australian company since Telstra in 1997.However, reports since Wednesday night from multiple outlets, including the Australian Financial Review, Sydney Morning Herald and The Australian, state Firmus is scaling back its asking price from $11 to $9 or even $8.25 per share.That would trim the company’s valuation to as low as $32.78 billion, assuming the same number of shares are listed.One report even speculated the October 23 IPO could be scrapped, although that is far from confirmed at the time of writing.Read moreIs your suburb on the list? The top 10 Australian councils with mega data centre plansNine.com.au has contacted Firmus for comment about those reports.The offering price drop alone, though, is a significant turnaround in a matter of mere days for Firmus.Just this week, the company has gone from saying the interest from prospective investors was far greater than the size of its listing to scrambling to stop the float from taking on water.AdvertisementFirmus was founded in 2019 by Oliver Curtis – the husband of Sydney publicist Roxy Jacenko, and a previously convicted insider trader – his cousin Tim Rosenfield, and former brother-in-law Jonathan Levee.Backed by major companies including tech behemoth Nvidia and investment giant Blackstone, it has an unusual set-up among data centre operators.Unlike other companies in the sector, which typically only provide the land and some limited infrastructure for tech companies to house their servers, Firmus promotes itself as having a “full-stack infrastructure” approach.Firmus claims to be far more energy- and water-efficient than other data centre operators. Tasmanian governmentAdvertisementAdvertisement“We design, build and operate the entire platform, from the chip to the grid,” the company states.It also lends out Nvidia computer chips to AI companies.It claims to be significantly more energy- and – crucially – water-efficient, using up to 99 per cent less water for cooling than other data centre providers.However, after the initial excitement about the IPO, analysts have pointed to a series of potential red flags for investors.AdvertisementFirmus has about $US30 billion in debt – roughly as much as the $43.7 billion valuation it aspires to.That latter figure is also a huge jump from the $US10.5 billion (approximately $15 billion) valuation it received during a fundraising round just two months ago.“For the bulls, that increase reflects the extraordinary growth in contracted capacity, new customer agreements and the strategic value of AI infrastructure,” Pepperstone head of research Chris Weston said.Firmus was set to enjoy the biggest listing on the ASX since Telstra went public in the 1990s. GettyAdvertisementAdvertisement“For the bears, investors are being asked to pay today for a very large amount of capacity, earnings and cash flow that still need to be delivered.”While Firmus would be one of the few artificial intelligence companies on the ASX – providing one of the only avenues for Australian investors to gain exposure to the AI-driven tech boom – another analyst said the lack of detail around the firm is “unprecedented”.Read moreReality TV star Sam Wood to apply for bail after DV charges“Firmus is probably one of the most polarising IPOs I have ever seen,” Ten Cap portfolio manager Jun Bei Liu said in a research note on Wednesday. Advertisement“The lack of detail they disclose is unprecedented.“I think Firmus is a very high-risk proposition – very high profile, but with enormous risk involved.“97 per cent of the data centre capacity they’ve promised hasn’t even been built.“They might deliver cheaper earnings in two years if they build what they promise, but that’s speculative.”Contact usrightArrowShare a tip-off, video or photo with usWhat $157b Paramount-Warner Bros. media merger means for streaming in AustraliaBiggest Australian listing this century appears in doubt as AI start-up scrambles for supportThe quiet $22.8 million problem brewing before activewear brand Stax collapsedASOS confirm ‘unauthorised activity’ after customers received threatening app alert in suspected hack