Firmus Technologies, an Australian operator of AI data centers backed by Nvidia, has withdrawn its planned listing on the Australian Securities Exchange after investor demand fell short of its asking price, ABC News reported. The company announced the decision Friday morning in Australia, Thursday evening U.S. Eastern time, and said it would seek capital from private markets instead.

What Happened

The float targeted a valuation of about A$44 billion, according to ABC News, which put the planned raise at A$7 billion. Capital Brief, citing the company's media release, reported the raise as A$8 billion. Shares had been offered at A$11, and ABC said a cut to about A$8.25 was considered as the bookbuild struggled. Trading had been scheduled to begin Oct. 23.

Firmus blamed recent market volatility and prevailing market conditions. Its board said the terms on which the offer could go ahead would not reflect the strength of the business or its long-term growth outlook, and concluded that proceeding was not in the interests of the company and its shareholders, Capital Brief reported.

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The company said it will pursue private funding while weighing other public and private options. ABC said the offer was set to be the largest float on the Australian share market since Telstra in 1997.

Why It Matters

Firmus is a so-called neocloud, a company that builds data centers filled with Nvidia GPUs and rents the computing capacity to AI developers. Nvidia owns 7.2% of the company, according to ABC. ABC said Firmus has seven AI factories planned across Australia, Singapore, Indonesia and Malaysia; two are operating and the other five are under development, with completion targeted within 24 months. Tech Startups reported that the company has capacity agreements with Meta in Southeast Asia and with OpenAI from facilities in Malaysia.

The failed float suggests public investors are less willing than private backers to pay up for debt-funded AI infrastructure. Tech Startups said Firmus was valued at about US$10.5 billion in a funding round in August, meaning the IPO price implied roughly a tripling in two months.

ABC cited prospectus projections showing about US$30 billion of debt by 2028 against roughly US$5 billion in operating earnings. UniSuper Chief Investment Officer John Pearce told ABC that Firmus had a compelling story but not a compelling valuation, describing it as priced to perfection and noting it would need to raise more capital. He added that the ASX needs new growth stories and that Firmus could have been one at the right price. Morningstar strategist Lochlan Holloway said neoclouds carry heavy debt and warned that credit has played a part in nearly every boom-and-bust cycle.

ABC also said some investors raised concerns about co-CEO Oliver Curtis, a former investment banker who served a year in prison a decade ago for insider trading. Curtis leads the company with co-CEO Tim Rosenfield.

What to Watch

The next test is the valuation Firmus can secure in a private round and whether existing backers, including Nvidia, take part. Other neocloud operators weighing public listings may also reconsider their timing after a deal of this size failed to clear at its marketed price.