FinanceNews.com.auFirmus IPO collapse exposes cracks in AI valuation bubble
Australian AI start-up Firmus pulled its $44 billion stock market float after investors said the price was way too high, raising doubts about the whole AI valuation boom.
The spectacular failure of neocloud start-up Firmus, previously the darling of Australia’s AI scene, has exposed the “cracks” in a trillion-dollar industry largely built on imagination.
Australian neocloud start-up Firmus abandoned its ASX float after investors rejected its extraordinary $44 billion asking price.
Analysts called the valuation greedy for a company with just two running data centres, and its US model CoreWeave lost 15 per cent of its stock in a single day.
The collapse has sparked wider questions about whether mega AI players like OpenAI and Anthropic can achieve their hoped-for valuations when they eventually try to list.
If you hold AI-linked shares or funds, analysts are now questioning whether sky-high valuations across the sector, including OpenAI and Anthropic, can hold up when they try to list.
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