Data centre operator Firmus pulls blockbuster ASX float after lacklustre demandBy business reporters Nassim Khadem and Lin LinThe BusinessTopic:Stock MarketPosted Fri 9 Oct 2026 at 9:12amFri 9 Oct 2026 at 9:12amFri 9 Oct 2026 at 9:12am, updated Fri 9 Oct 2026 at 10:50amFri 9 Oct 2026 at 10:50amFri 9 Oct 2026 at 10:50amFirmus Technologies is building AI data centres in Tasmania, but most of its planned centres are not built yet. (Supplied: Firmus Technologies)In short: The mega float of data centre operator Firmus has been pulled.It follows poor interest from investors amid concerns about the company's debt and a lack of detail.What's next?The company says it will pursue private funding.AI data centre company Firmus has withdrawn its application to list on the ASX, scrapping what was set to be one of Australia's biggest share market floats.The company cited recent market volatility and conditions, saying the offer would not appropriately reflect its long-term growth prospects.Firmus said it would now pursue private market funding while considering other options."We will provide additional information to shareholders as those options progress," the company said in a statement.Firmus, the AI factory builder backed by chip-making giant Nvidia, was set to be the biggest float in the Australian share market since Telstra in 1997.The company's founders, co-chief executives Oliver Curtis and Tim Rosenfield, targeted a $44 billion valuation, but prospective investors pulled back based on the high sale price of $11 a share and concerns over an AI bubble.Yesterday, reports emerged that Firmus and its advisors were considering reducing the size of the initial public offering (IPO) and lowering the per-share price from $11 to $8.25.Tasmanian Premier Jeremy Rockliff with Oliver Curtis and Tim Rosenfield at Firmus's St Leonards, Launceston site. (Supplied: Tasmanian government)Many investors were also focused on Mr Curtis's criminal background — he is a former investment banker who served one year in prison a decade ago for insider trading.With AI infrastructure demand accelerating across the Asia-Pacific, Firmus's website says its broader portfolio spans seven AI factories across four countries: Australia, Singapore, Indonesia and Malaysia.It said two sites were operational in Australia and Singapore and five were "under development, targeting ready-for-service over the next 24 months".Its website also spruiks its relationship with US chip giant Nvidia, which has a 7.2 per cent stake in Firmus.Institutional investors raise doubtsAhead of Firmus's announcement this morning, UniSuper chief investment officer John Pearce released an investment update detailing potential investors' doubts about the AI company and why the super fund would not directly invest in it."Firmus is a neo-cloud company, and that means it provides cloud services, in very simple terms, to AI companies," he said."The capital raise will be about $7 billion and that will give Firmus a total market value of around $44 billion."Mr Pearce said even though UniSuper was not directly investing in Firmus, UniSuper would own some shares if the float proceeded "because we have index strategies in our portfolios and Firmus will ultimately be a part of the major indices".He said the reason UniSuper was doubtful about investing was the high valuation."We think that Firmus indeed has a compelling story. It just doesn't have a compelling valuation," he said."At the current valuation, it's priced to perfection. So much has to go right to justify the valuation."Furthermore, we're quite concerned that Firmus will have to keep coming back to the market for a lot more debt and more equity to fund its expansion plans."Morningstar senior market strategist Lochlan Holloway yesterday raised concerns over the company's debt levels.Lochlan Holloway is not convinced by the Firmus float. (ABC News: John Gunn)"The neo-clouds are heavily geared," he wrote in an economic note."The model is to borrow against customer contracts to buy chips, then use the rent to repay the loans."Once its data centres are built, Firmus expects to be carrying about $US30 billion ($43 billion) of debt, about six times the $US5 billion of operating earnings it forecasts for 2028."Borrowed money alone does not make a bubble, and plenty of infrastructure is sensibly funded with debt. But credit is the common thread running through essentially every boom and bust cycle," Mr Holloway said.Loading...