Nvidia-Backed Firmus Scraps $5 Billion Australia IPO as Markets Wobble

Firmus Grid, an AI cloud company backed by Nvidia, has pulled what would have been Australia’s biggest initial public offering in almost 30 years. The Sydney-based company had planned to raise nearly $5 billion at a valuation above $30 billion. It cited market volatility and said it will seek private funding instead.

Firmus is among a new generation of cloud providers that rent Nvidia chips to AI developers such as OpenAI and Meta Platforms, serving as alternatives to Amazon, Microsoft and Google. The Australian firm is also a member of Nvidia’s AI Compute Partnership, a program in which Nvidia backs cloud companies’ chip purchases in return for a share of their revenue. In June, Nvidia agreed to back Firmus’s purchase of 170,000 of its most advanced chips.

Firmus’s IPO cancellation comes as Nvidia is rethinking the structure of the AI Compute Partnership program. The chipmaker paused some deals with cloud providers in August and is rewriting some contracts, The Information reported this week. Some cloud companies, including Nebius, haven’t participated in the program because they don’t want to give Nvidia a cut of their revenue and could borrow money on their own. Nvidia, for its part, has worried that some participants could rely on it too heavily for money.

Investors had their own doubts about Firmus. Its target valuation was nearly triple what it fetched in an August funding round, even though it runs just two data centers and has no record of building them at scale.