By Anthony Macdonald and Jenny Wiggins
Firmus plans to have up to $30 billion of committed annual revenue when it launches its initial public offering later this year, as existing investors gain more confidence after its expansion into Indonesia.
Firmus and its advisers are seeking to have its public offering in front of investors late in the September quarter, with a listing in the final quarter of the year once the company has secured financing and customers for a new data centre development in Batam, Indonesia and firmed up plans for a third Australian site.
The funds raised from a listing could help buy the computing power required for the third site, with Firmus seeking to build AI factories in Tasmania, Melbourne, South Australia and NSW.
Firmus’ biggest customer, US social media giant Meta Platforms, has the right to acquire the group’s compute capacity at any or all of the Australian sites under a deal agreed earlier this year.
Sources close to the company, not permitted to speak publicly because the details are private, said Firmus could have $25 billion to $30 billion in annual committed revenue by the time it floats.
Firmus’ first Australian AI factory, the BKII facility in Melbourne, owned by CDC Data Centres, is in testing and should be operational in the coming months, while its new Launceston site should be close to completion.
The company is expected to raise more than $1 billion in equity to help finance a new Indonesian data centre project in the coming weeks and before the IPO, including from investors that co-founders Oliver Curtis and Tim Rosenfield met on their recent non-deal roadshow.
The founders are also in late-stage talks with private credit firms and banks about another $10 billion-plus debt package to buy computers and chips for its new Indonesian data centre.
The float was delayed to arrange the Indonesian deal, sources said.
The Batam project is backed by Nvidia but follows the same investment pattern as Firmus’ other developments in that the company will invest in, pay for and own, the AI infrastructure. Firmus will rent the data centre from Singaporean developer DayOne.
Firmus forecasts it will receive between $US25 billion ($33 billion) and $US30 billion from committed offtake agreements during the first six years of the Indonesian development, with operations expected to start from 2027. Nvidia has underwritten a floor price.
Shaun Weick, portfolio manager at Wilson Asset Management, said the deal struck with Nvidia to run the new 380 megawatt Indonesian data centre was “materially positive” and would boost Firmus’ IPO valuation.
“Clearly it’s transformational in terms of de-risking the business model and the earnings profile for the business,” Weick said, noting the project’s six-year guaranteed offtake.
Wilson Asset Management has a stake of around 4 per cent in Firmus, and has added to its position, buying stock in the most recent capital raise at $145 per share.
Firmus had previously signalled that it would delay its IPO, which was mooted for mid-year, until around September. The reason for that delay became evident after it announced its new Indonesian project on Monday.
While Firmus’ last capital raising implied a valuation of $US6 billion, Weick forecast that it could rise to as much as $US80 billion, citing comparisons with the enterprise valuation of Nasdaq-listed AI cloud computing company Nebius, which is trading on a multiple of 27 times forecast 2028 earnings.
Despite a slowdown in the global IPO market and United States news reports that ChatGPT’s owner OpenAI is reportedly considering delaying its float until next year, Weick said there was still a window open for quality companies that were priced attractively.
But venture capitalist and former Microsoft executive Daniel Petre said he was still not convinced by Firmus’ business case, and that the lofty valuations for the company’s IPO could indicate a market bubble.
“When Nvidia gets a commitment in chips, this revenue gets a multiplier that allows them to increase their valuation,” Petre said. “So they invest in lots of infra players like Firmus, who then commit to buy chips.”
HSBC chief economist Paul Bloxham has likened the recent surge in data centres in Australia to the liquefied natural gas boom of the early 2000s, arguing in a new report that foreign ownership of many centres could lead to profits flowing overseas and that the near-term economic benefits for Australia are limited.
One of Firmus’ corporate entities, known as Firmus Grid, is registered in Australia, but the company’s co-founders live in Singapore.
Bloxham pointed out that most of the equipment used in data centres is imported from Asia, benefiting Asian exporters, not Australian manufacturers.
Benefits of data centres to the local economy partly depend on successful adoption of AI by local businesses and increases in productivity, he said. “So far this has been slow.”
He warned that policymakers needed to assess data centres’ needs for local energy and water, and whether the benefits of having many data centres are big enough to warrant the costs.
“If the data centres draw energy and water out of existing supplies, with insufficient additional investment in supplies, they will likely put upward pressure on the prices of these resources – potentially crowding out other industries and also affecting the cost of living for households and input costs for other firms,” he said.
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