The development reveals a new weakness in the artificial intelligence funding boom, the report said.
Firmus’ planned $5.5 billion initial public offering is facing uncertainty after the deal failed to garner enough support for the marketed share price of 11 Australian dollars (about $8), according to the report, which cited unnamed sources. Some investors grew cautious days after Firmus said it had learned of interest above the offer size, placing the company on course for a valuation of $30 billion.
Firmus has not provided a clear indication of a price or deal structure, per the report, which called the situation an “unusual communication gap” that has led to speculation the price may be reduced or the IPO simply called off.
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The deal highlights an increasing concern over the amount of capital AI infrastructure companies are seeking from public markets as borrowing costs increase, the report said.
Firmus’ valuation is chiefly based on the company constructing a network of data centers throughout Asia to serve clients like Meta and OpenAI, according to the report. Proceeds from the IPO are needed to finance that effort.
“Investors still believe in AI,” said Maxence Visseau, chief investment officer at investment firm Arkevium Capital, per the report. “What they won’t do is pay any price for companies that spend huge amounts on data centers, depend on a few big customers, and promise profits years from now.”
In related news, Citi Wealth said this week that the AI buildout is still in its early-to-middle stages, PYMNTS reported Wednesday (Oct. 7). The AI investment cycle is facing added scrutiny because of higher interest rates, capable open-weight models, pressure from regulators and increasing infrastructure costs.
But even despite the “growing noise” surrounding the AI buildout, other signals are still strong, including semiconductor demand that is outpacing near-term supply, U.S. core capital goods orders that ticked up in the first half of the year, and AI-related exports fueling growth in countries like South Korea and Taiwan, Citi said.
The Bank for International Settlements issued a report in July cautioning that outsized investment could make the AI boom unsustainable, arguing that past booms “ended in sharp corrections,” which had wide-ranging economic implications, PYMNTS reported.
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