"A Lifesaving Deal": Nvidia May Back Firmus After Its IPO Is Canceled

Nvidia, a leading developer of AI chips, is in talks to invest “hundreds of millions” of dollars in Firmus, an Australian company specializing in cloud technologies for AI. The Information reports this, citing sources familiar with the situation. The Australian newspaper adds that the amount in question could be at least $500 million. The paper calls this a “lifeline” for Firmus. Two weeks ago, the company canceled an IPO that could have been one of the largest in Australia.

Firmus is seeking additional support from Nvidia as part of a private funding round following the collapse of its planned IPO, The Australian reported. Nvidia’s potential involvement could help Firmus secure funding to carry out its plans to develop AI infrastructure in Australia and the Asia-Pacific region. However, the deal has not yet been finalized, and its terms and amount have not been disclosed, notes Investing.com.

An Nvidia spokesperson did not respond to Bloomberg's request for comment.

The move signals that Nvidia will continue to support non-cloud providers — leveraged companies that lease out AI infrastructure and are facing difficulties amid investor concerns over massive construction costs and rising borrowing costs, Bloomberg reports, citing The Information. Nvidia is already an investor in Firmus and a number of other similar non-cloud providers, the agency adds. For example, Nvidia owns about 10% of the cloud provider CoreWeave, whose stock sell-off in October partially spilled over into AI stocks.

On October 21, amid reports of possible support for Firmus from Nvidia, shares of cloud-related companies are rising: CoreWeave is up about 2% in premarket trading, and Nebius shares are rising by more than 3%. Meanwhile, shares of the Australian construction company Maas Group—which owns a 3.2% stake in Firmus and has signed construction contracts with the data center operator—rose nearly 2% in Australia. Meanwhile, Nvidia’s own shares are up 2% ahead of the start of regular trading on Wednesday. They are up 16% year-to-date.

On October 9, Firmus abandoned its A$5 billion ($3.3 billion) IPO, which, according to Bloomberg, could have been one of the largest in Australian history. The company was unable to attract global investors, who have become more cautious about AI companies: they were concerned about Firmus’s valuation, its funding needs, and its limited operational track record. Following this, Firmus stated that it would explore other options for private and public financing.

This article was AI-translated and verified by a human editor