Firmus's IPO came to an end, and the listing threshold for AI projects in Asia was raised

The Zhitong Finance App learned that the collapse of Firmus Grid Ltd.'s initial public offering (IPO) is triggering a chain reaction in the hot Asian stock market, making investors more picky about AI infrastructure transactions that rely on future profits.

The Nvidia-backed data center operator withdrew a listing deal that raised up to $5.5 billion last Friday after investors were deterred by a sharp rise in its valuation to $30 billion. The Australian company is currently discussing a round of private equity financing with existing investors.

The collapse of Firmus' listing indicates that investors are becoming more cautious after more than a year of trading frenzy. Previously, companies poured into the market one after another to finance AI construction. The data shows that since this year, IPOs, placements and major transactions in the Asia-Pacific region have raised nearly 250 billion US dollars, adding up to the total amount of about 260 billion US dollars in 2025.

“Investors are asking who will pay and at what cost of capital,” said Max Herron-Vellacott, portfolio manager at Sydney Private Portfolio Managers. He believes that risk-reward calculations are being scrutinized more strictly when making investment decisions. “This raises the threshold for every transaction, and investors will be far less tolerant of optimistic assumptions than before.”

The recent performance of some IPOs has also revealed a gradual spread of unease. Investors are beginning to draw a clear line between companies: companies with reliable performance records and monetization, and companies that are earlier in their life cycle and more hungry for cash.

Winston Ma, executive director of the New York University Law School Global Public Investment Fund Forum, said that for data center operators such as Firmus, the dividing line is between operating facilities that generate immediate returns and new multi-gigabyte projects funded by billions of dollars in debt. Winston Ma is also a Dragon Global Family Office partner.

“Firmus' withdrawal of the offering is a clear sign that the open market is repricing AI infrastructure,” Winston Ma said. “In Asia, the next wave of AI data center production capacity is expected to be built in large quantities, which will raise the threshold for any IPO. Sponsors need stronger contract purchases, more clear visibility into the megawatts of electricity, and more conservative leverage assumptions.”

For Firmus, only 46 MW of its 912 MW project reserve has been completed. Investors are required to value the company based on future profits, which all depend on successful data center delivery.

Investors compare many such companies to so-called “new cloud vendors”, such as CoreWeave and Nebius Group, which are among the most leveraged and volatile AI stocks in the US. Furthermore, although Nscale Ltd. and SB Energy, supported by SoftBank Group, applied for a US listing last month, they have yet to launch marketing for their respective deals.

Pure data center developers are facing stricter scrutiny, but hardware and chip stocks are still supported. Sumeet Singh, head of stock research at Aequitas Research, said that AI-related companies that have achieved profits, such as printed circuit board manufacturers and memory chip manufacturers, have had limited impact. PCB manufacturer Suzhou Dongshan Precision began evaluating demand on Monday and plans to go public in Hong Kong to raise up to 3 billion US dollars.

“Firmus is not generating revenue and lacks a track record,” Singh said. “This is similar to SB Energy and Nscale in the US. Raising money now, the actual revenue will not be reflected until a few years later.”

However, as rising interest rates put pressure on huge capital requirements, prices have become a pressure point for investors to fund new transactions, and some revenue growth forecasts are being driven by this demand for capital. Wall Street's growing anxiety about AI and its potential impact on other businesses has prompted investors to sell off a range of related stocks.

Hans Stege, head of investment research at PrePublic Equity Partners, said that the growing negative sentiment and public opinion surrounding the construction of local data centers has increased the risk of project execution, and may also adjust the discount rate applied by the market to these high-profile futures that have been signed but not built.

“Currently, we are seeing the private market stepping up efforts to fund the expansion,” Stege said. “Given its incredible appeal in attracting large orders from hyperscale cloud vendors and labs, and the support of companies like Nvidia, this isn't surprising. But you have to think that the supporters behind it expect this group of companies to go public at some point.”