Australian data center operator Firmus, preparing to raise about $5 billion in one of the country’s largest-ever initial public offerings, is expected to report a $77 million loss for the first half of its next financial year, putting investor appetite for AI infrastructure businesses under scrutiny.
Firmus, backed by investors including Blackstone and counting Nvidia, Meta and OpenAI among its customers, expects to report a pro forma after-tax loss of $77 million for the six months ending June 30, 2027, two people familiar with a draft prospectus circulated to prospective investors this week told Reuters.
The company is scheduled to begin trading on the Australian Securities Exchange on October 22. Its IPO would be Australia’s second-largest on record, behind Telstra’s roughly $10 billion listing in 1997, according to Dealogic data.
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Local media reports have suggested Firmus could command a valuation of as much as $60 billion after the offering, setting up a potentially significant gap between its current earnings profile and the expectations embedded in its prospective market value.
That gap is at the heart of the IPO.
Firmus has historically been loss-making, according to one person familiar with the draft prospectus. The company attributes those losses to the cost of developing its data center platform and expanding sufficiently to secure large customer agreements.
The IPO proceeds are expected to be used largely to finance additional capital expenditure, meaning investors are effectively being asked to provide more capital before the existing business has reached profitability.
The company’s investment case rests on the expectation that the infrastructure being built today will generate substantial earnings as AI demand expands.
Firmus estimates that its data centers, once fully developed, could generate combined annual earnings of about $5 billion within five years, according to a third person familiar with the prospectus. That projection represents a dramatic step up from the company’s current financial position and illustrates the scale of the bet being made on AI infrastructure.
Firmus currently operates two data centers in Australia and Singapore, while five additional facilities are under development across the Asia-Pacific region. Most of those projects remain at relatively early stages.
The expansion reflects the enormous physical infrastructure requirements of the AI industry. Training and running advanced AI models requires large quantities of specialized computing equipment, and the data centers housing those systems require substantial amounts of electricity, cooling capacity, networking infrastructure, and land.
For companies such as Firmus, the opportunity is to become the physical layer supporting that demand.
Its customer list provides an important part of the investment story. Nvidia is a central supplier of the accelerators used to power AI workloads, while Meta and OpenAI are among the world’s largest developers and users of advanced AI systems.
Having such customers can provide credibility and potentially long-term demand visibility. But customer relationships alone do not remove the financial risks associated with building data centers.
The projects require large upfront investments before they begin generating revenue, creating a significant gap between capital expenditure and operating returns. Delays in securing power, permits, equipment, or financing can push back the point at which a facility starts generating earnings while construction costs continue to accumulate.
That makes Firmus’s projected $5 billion annual earnings particularly dependent on execution.
The company’s five facilities under development are mostly in early stages, according to the people familiar with the prospectus. Their eventual contribution to earnings will therefore depend on how quickly construction progresses, how much capital each site requires, and when customers begin using the capacity.
The IPO comes at a time when investors are differentiating between companies that benefit from the AI boom through software and chips and those that must spend enormous amounts of capital to physically accommodate AI workloads.
Data center operators occupy the latter category.
Their economics can resemble infrastructure businesses because long-term customer agreements can provide visibility into future revenue. But the construction requirements are also capital-intensive, and returns depend heavily on power costs, financing conditions, utilization rates, and the ability to secure sufficient customer commitments.
Firmus’s proposed listing will therefore provide investors with an opportunity to assess how the public market values an AI infrastructure company that has significant growth expectations but has yet to establish consistent profitability.
The IPO arrives as the AI infrastructure industry is attracting enormous amounts of private capital. Investors have financed data centers, power projects, specialized cloud providers, and other infrastructure designed to accommodate the rapid expansion of AI computing.
Public markets have consequently become an important potential source of additional capital for the sector.
Firmus’s IPO could demonstrate whether investors are willing to extend private-market valuations into the public market when the underlying companies remain heavily dependent on future capital expenditure.
The proposed scale of the offering also gives the transaction significance for Australia’s capital markets. A $5 billion IPO would be an unusually large listing for the Australian exchange and could help establish the ASX as a venue for companies seeking capital to finance the physical infrastructure behind the global technology boom.
However, the company’s expected $77 million first-half loss is not necessarily inconsistent with an infrastructure business in an aggressive construction phase. Data center operators can remain loss-making while they spend heavily to build facilities that generate revenue only after they become operational.