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The recent sharp decline in the stock prices of artificial intelligence (AI) infrastructure companies stems from the successive cancellations of initial public offerings (IPOs) by major Australian data center firms, the Financial Times reported.
Firmus, a data center operator backed by Nvidia and Blackstone that pursued an IPO boasting a valuation of 44 billion Australian dollars (approximately 41 trillion won)—the second-largest in Australian history—abruptly withdrew its IPO plans on October 10.
AirTrunk, another Australian data center operator, also abruptly canceled its plans for a Singapore REIT listing, citing worsening market conditions.
Market experts believe this stems from overly aggressive corporate valuations and excessive borrowing plans.
The valuation put forward by Firmus was twice as high as that of its funding round three months prior.
In addition, Firmus planned to issue up to an additional 30 billion dollars in bonds following its listing, which became a decisive factor that turned investors away.
Mike Intrator, CEO of CoreWeave, a major U.S. neocloud company, wrote in a memo that "the funding failures of Firmus, AirTrunk, and Lambda Labs are spilling over into negative perceptions of our company. These companies attempted to raise massive amounts of capital while ignoring execution, revenue, and scale."
The Australian government, which has touted the country as an optimal location for data center investments for AI companies such as OpenAI and Anthropic by highlighting low political risks and renewable energy potential, has suffered a major blow from this incident.
The newspaper also introduced a cautious view that while short-term market shocks are inevitable, the overall Australian data center industry has not collapsed.
Firmus plans to raise capital through private capital markets such as private equity instead of the public offering market, and Nasdaq-listed SharonAI, despite its stock plummeting by nearly 20% over the span of a week, intends to push ahead with a secondary listing on the Australian stock exchange.
The Financial Times analyzed that "some investors view the current correction as an opportunity to invest in true gems guaranteed to generate reliable revenue within the AI and data center ecosystem," adding that as market bubbles dissipate, the value of construction, infrastructure, and engineering firms with secured long-term contracts will be highlighted.
Jun Bei Liu, founder and senior portfolio manager at investment firm Tenacious Ventures, said that "the market environment going forward will become even harsher for speculative investors seeking quick riches without thorough analysis."
(Photo: Getty Images)
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