In The Guardian, our co-founder Armina Rosenberg shared Minotaur Capital's perspective on Firmus Technologies, the AI datacentre company whose near-$44bn valuation is under pressure ahead of its anticipated ASX debut. Guardian Australia reports that Firmus may slash its valuation or shelve what would have been Australia's largest IPO since Telstra in 1997.
Armina highlighted a key risk for investors: while Firmus has contracts with Meta, OpenAI and Nvidia, about 97% of its contracted revenue sits on sites that aren't yet built.
"You only get near the offer price if delivery, financing and renewals all go to plan," said Armina.
She also noted that while Firmus's Asian focus sidesteps growing community backlash against datacentres in Australia and the US, it brings its own hurdles, including power constraints and construction times.
As the article points out, the key question isn't whether AI will keep growing, but whether investors are paying too much for a start-up with just two small operational sites. Firmus's valuation climbed from $1.85bn to almost $44bn in just over a year, and Morningstar analyst Lochlan Halloway warned that market sentiment had entered the euphoric phase.
For us, it's a timely reminder that even a compelling growth story must be weighed against execution risk and the price being paid.
To read the article, click the link below.