According to Reuters, Firmus abandoned its initial public offering (IPO) plan on October 9 due to unfavorable market conditions. The company will now seek private financing and consider other options for raising capital.

This cancellation has raised questions from the outside world about how much investors are willing to pay for the yet-to-be-built AI infrastructure.

After considering reducing its valuation by $11 billion, IPO has fallen through.

Firmus initially had a target valuation of nearly A$44 billion (US$31 billion), with an issue price of A$11 per share.

However, due to weak institutional demand, there were discussions in the market about lowering the issue price to around AUD 8.25, which would correspond to a valuation of approximately AUD 33 billion.

This means that the proposed valuation reduction is 25%, but before the re-pricing was completed, the entire IPO was already withdrawn.

This potential adjustment comes after concerns about the rapid expansion of the company's valuation in the market have intensified.

Firmus was valued at approximately $10.5 billion in its first round of financing in August, which means that its proposed public market valuation has almost tripled in just two months.

In earlier discussions regarding the downvaluation of Firmus, these concerns had already emerged, with investors questioning whether its expected returns were sufficient to support such a price.

Firmus, supported by NVIDIA, has only achieved a small portion of its planned production capacity.

Firmus is supported by major investors such as NVIDIA and Blackstone.

However, compared to its expansion ambitions, the scale of the company's operational infrastructure is still relatively limited.

The company currently operates with a computing power of about 42 megawatts, while its long-term goal is close to 1 gigawatt.

This gap highlights the financing challenges faced by AI infrastructure stocks.

Before their facilities can generate revenue and support the expected valuation, developers must first secure electricity, land, cooling systems, as well as the expensive NVIDIA GPU.

Firmus has also recently lost its cooperative relationship with CDC Data Centres, which further increases the uncertainty of its expansion plans.

Firmus IPO's defeat has triggered financing issues for AI

At the time of this withdrawal of IPO, other AI infrastructure companies are still continuing to raise billions of dollars through debt and equity financing.

For example, CoreWeave recently sought additional convertible debt financing to support the expansion of its computing power.

Firmus This IPO failure also affected the Australian construction company Maas Group. Due to market concerns about its investments and business exposures, the company's stock price fell by more than 6% at the close on Friday.