Australian data center company Firmus listed at a blockbuster $43 billion valuation in its IPO.
Firmus Technologies, a developer of artificial intelligence data centres, plans to raise A$7 billion from investors on the Australian Securities Exchange on October 23. The float values the company at up to A$43.7 billion, making it the second-largest initial public offering in Australian history after Telstra in 1997.
Yet many investors doubt Firmus deserves that valuation. The company is losing money, and only about 5% of its sold capacity is operational—compared with roughly 25% for rivals such as NextDC, Australia's largest listed data centre company. At the proposed price, Firmus would trade at about four times NextDC's valuation. A media report late Wednesday suggested the company's bankers were even considering lowering the offer price.
The concerns are substantial. Firmus has only two operational data centres; the rest remain in planning or construction. The company's valuation has tripled in less than a year—from A$6 billion in November 2025 to more than US$10.5 billion (A$15 billion) in August 2026, and now to A$43.7 billion. While Firmus has signed new deals since August, including one with OpenAI, their commercial value has not been disclosed.
The leadership adds another controversy. The two co-chief executives are cousins, and one, Oliver Curtis, is a former investment banker who served time for insider trading a decade ago. The team has demonstrated it can raise capital, but their ability to deliver multibillion-dollar building projects in a crowded market remains unproven.
Firmus builds what it calls "AI factories"—data centres packed with Nvidia chips that it rents to major tech firms including Meta and OpenAI. This differs from traditional data centre operators such as NextDC or AirTrunk, which rent space and power while customers bring their own equipment. By owning the chips, Firmus carries significant risk: Nvidia releases new processors annually, and older chips depreciate rapidly. The company could find itself holding obsolete hardware if the industry shifts away from Nvidia's technology. With only a handful of major customers and Nvidia simultaneously serving as supplier, investor and customer, Firmus's success depends heavily on Nvidia maintaining its market dominance.
The numbers illustrate the exposure. Firmus has signed contracts for 912 megawatts of capacity, but only 46 megawatts—roughly 5%—is operational. The company expects to lose A$77 million in the first half of this financial year.
The Reserve Bank of Australia last week warned that circular AI financing is creating vulnerabilities in the financial system, citing investor losses of faith in big tech companies' AI profitability as a possible trigger. While the RBA did not name Firmus, nearly every element of its warning applies. Firmus depends on sustained big tech spending, funds its expansion with debt, and relies on Nvidia—its key supplier—which is simultaneously an investor and customer. Economists at the Bank for International Settlements have found such arrangements common: nearly half the value of deals between AI firms involve companies that also trade with one another, drawing comparisons to the late-1990s telecommunications bubble.
Community opposition is mounting. Firmus plans three sites in northern Tasmania, with the largest at Bell Bay positioned to become the state's largest electricity user. Some 6,000 people signed a petition against the Bell Bay facility, while more than 9,000 signed a petition to parliament calling for a pause on new AI data centre approvals. Students walked out of classes in Launceston in protest. Firmus counters that its sites use minimal water and operate on Tasmania's predominantly renewable power supply.
The broader context raises familiar questions. Major new technologies often trigger bubbles—investors grow euphoric, prices overshoot, and the bubble bursts, as occurred with railways in the 1800s and the internet in the late 1990s. In both cases, the technology transformed the world, yet many investors still lost money. The question now is whether AI follows the same trajectory and, if so, how far along the cycle we are.
The signals are mixed. US technology giants plan to spend approximately US$900 billion on AI infrastructure this year, yet AI generates only between US$150 billion and US$220 billion in annual revenue, according to The Economist. Share prices in the largest AI companies have fallen roughly 20% since June. Firmus has real customers and genuine demand, but at this valuation, investors are betting that everything goes precisely right. For ordinary Australians, the stakes are personal: if Firmus enters major share indices, passive index funds must buy it. With many superannuation funds invested in index trackers, workers will own a piece of Firmus through their retirement savings whether they choose to or not—potentially A$500 million to A$1 billion in passive fund purchases within three months of listing.