Firmus, an Nvidia-backed Australian data center operator, scrapped its planned IPO of $5 billion (A$7 billion). It announced the decision on October 9, 2026, after investors expressed discontent with its valuation. Reuters stated that the firm will instead look to secure funds privately. The setback shows that investors are taking a closer look at AI infrastructure valuations, debt and profits, even as the industry continues to attract billions in funding.A valuation that nearly tripled in two monthsOriginally established in 2019 as a bitcoin mining company, Firmus has witnessed its valuation escalate from US$1.85 billion in September 2025 to US$5.5 billion in April 2026, and US$10.5 billion in August, according to earlier reports by Cryptopolitan. The proposed A$11 price per share indicates an equity valuation of approximately US$30.6 billion (around A$44 billion).Firmus AI Data Center Valuation Timeline: US$1.85B to US$30.6B (2025–2026)According to John Pearce of UniSuper, Firmus has an interesting story but does not have a fair valuation. He stated that the offer was “priced to perfection” and cautioned that in order to grow, extra debt and equity would be necessary. Firmus reportedly contemplated lowering its IPO price to A$8.25.Two sites live, five on paperFirmus has two data centers located in Melbourne and Singapore, while there are five data centers being developed in the Asia-Pacific region. Nvidia owns 7.2%, along with firms like Coatue, Blackstone, and Jane Street.Investors had other concerns besides the company’s ambitious expansion plans. ABC News reported that co-CEO Oliver Curtis’s previous insider-trading conviction also raised questions among potential investors.Firmus has ultimately changed its mind and is not going forward with its IPO. According to the company, the IPO terms “did not correctly reflect the strength” of its business and that proceeding would not be beneficial to its shareholders.The debt math behind the neo-cloud modelMorningstar strategist Lochlan Holloway warned that “The neo-clouds are heavily geared.”According to estimates, Firmus would have a debt of US $30 billion (about A$43 billion) along with an expected operating income of US$5 billion in 2028. That debt-to-income ratio of six to one leaves hardly any margin for any delays in construction or slowdown in demand.Holloway warned that credit plays an integral part in “essentially every boom and bust cycle.”Where the AI buildout money is goingThe outlook for spending is massive. According to PwC, global data center investments could hit US$31.6 trillion until 2050, and may even get close to US$50 trillion.However, this is accompanied by the consolidation of capital. Billion-dollar-plus funding rounds for AI accounted for almost 86% of the funding received at the beginning of the year, according to S&P Global research. Man Group has reported that debt issued in relation to AI may rise to US$465 billion.Firmus’ scaling back reflects the fact that investors are still investing in AI infrastructure but are being more discerning about to whom to give funds.The smartest crypto minds already read our newsletter. Want in? Join them.