# Firmus IPO Collapse Exposes AI Data Center Bubble

**Podcast:** Better Offline
**Published:** 2026-10-09

## Transcript

This is an iHeart Podcast.
Guaranteed human.
How do you know that Claude won't become manipulative?
This is a constant worry.
And you can actually catch the model thinking, I think X is actually true, but I'm going to tell the user why.
I'm Walter Isaacson.
On my new podcast, The Builders, I'm going inside the minds of the people shaping our future.
Listen to The Builders starting October 13th on the iHeart Radio app.
Apple Podcasts, or wherever you get your podcasts.
In October 2021, my brother David was diagnosed with pancreatic cancer.
A year later, he convinced me to make a podcast with him.
This podcast...
My biggest fear is that I am afraid of being forgotten.
My brother David is the story of the last chapter of my brother's life.
It's weird and messy and vulnerable, and I'm gonna share all of it with you.
Okay, so here we go.
Listen to My Brother David on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
There are thousands of podcasts that can tell you how to better yourself.
Get Worse with Kyle Pru is not one of those podcasts.
So if you're interested in getting thinner, going to therapy, starting peptides, setting boundaries, taking supplements, making your better, getting closure, then I would humbly recommend other podcasts.
If you're interested in blackmail, love bombing, cloning yourself, or getting revenge, then we've got a little something something for a dastardly individual like you.
Listen to Get Worse with Kyle Pru on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
Michael Lewis here to tell you about my new book, Blockers.
which gives you an inside look at the Trump administration and the public servants who stood in its way.
These were people who were securing our most sensitive data, keeping the public safe from all sorts of threats, and engaged in life-saving scientific research until they were told they no longer belonged.
And the question to me is, if they can't survive in our government, then what does it say about us?
Get Blockers now only at blockers.fm.
Hello and welcome to this week's Better Offline monologue, I'm your host Ed Zitron.
Thousands of miles away in the strange world of Australia, a pale horse has emerged in the form of Firmus, an NVIDIA-backed AI data centre company with a whole $50 million in revenue that is, or perhaps was, trying to raise about $5.5 billion in its IPO, which would have been, I think, the second largest in the history of the country.
At first, Vermas seemed like it would be another Australian core weave, another vehicle to raise debt to buy NVIDIA GPUs, backed by a $10 billion loan from Blackstone and Coachu, and a plan with the data center magnet called CDC to build $73 billion worth of capacity in what was once called Project Southgate, with plans to build the country's largest data center by April of this year.
Just any guesses, you know, put down some money.
How likely do you think that was?
Do you think it happened?
Do you think it did?
Anyway, Firmus has every backer that you'd expect from a dodgy data center company, funding from NVIDIA, Jane Street and Blackstone, all of whom also backed CoreWeave and multiple other AI data center projects, and an initial commitment from Meta to artificially boost its potential earnings by saying yes, once you build one of these data centers, which you have never done before, by the way, we'll absolutely pay you for it, under the direct assumption that very little will get done for many, many years, and I will say the correct one too.
It's unclear what happened to the data centers, other than the fact they haven't been built, but you've probably worked out by now why I keep referring to Project Southgate in the past tense, as CDC pulled out of the project a few days ago with around 2.5% of the capacity built.
And that's less than a month from when this company was meant to go public.
Not a great sign.
It's unclear who else Firmus will build with, but it's got bigger problems to deal with.
You see, its initial IPO valuation was meant to be around $50 billion.
Australian, I'm just saying dollars, just get over it.
Except when banks started offering shares, it priced around $11 apiece, or a valuation of $43.7 billion, followed by Australian pension fund Unisuper saying that, and I quote, it all comes down to valuation and that it will not have any meaningful exposure, citing that it...
that Thermos may have a compelling story, but not a compelling valuation.
And for those of you at home who've been playing, is that good?
That is not good.
Per the Australian Financial Review, Thermos has initially claimed in its original term sheet that it had indicative orders that priced above $11 a share.
only for the pricing of the IPO to be cut to $8.25 a share, with the AFR now reporting that the company may end up taking anywhere between $6 and $7 apiece to get the thing out the door.
As noted by hedge fund CEO, CEO of Plato, David Allen, speaking to the AFR, if the IPO was so well covered at $11 a share, why was it cut?
Well, I think the answer is obvious.
Firmus is a fucking stinker.
90% of its revenue backlog comes from two customers, Meta, as mentioned, and an unnamed major global technology company.
As well as, though this wasn't in the prospectus, a multi-year deal to provide compute to OpenAI out of data centers in Malaysia that do not exist and, let's be honest, will never exist.
Indeed, I don't know why nobody pointed at that within these stories.
I've read a lot of firmest stories and I haven't really found much discussion of that.
It's almost like everyone just kind of assumes that that was a bit.
I think it's a joke.
A little funny one except a multi-billion dollar joke, you know, much like Firmus.
As mentioned at the jump, Firmus has a whole 50 million dollars in revenue, annually speaking, but plans to build 10 gigawatts of capacity in the next five years, costing it hundreds of billions of dollars that it just doesn't have and nobody's going to give it.
Every promise underlying Fermus's valuation comes down to, to paraphrase Plato's David Allen, flaws the execution of some of the most ambitious infrastructure projects in history, and as Allen noted, valuing Fermus based on its EBITDA multiple, as in working out how valuable it is based on the cash that it might bring in, is kind of like valuing an airline based on planes being free and lasting forever.
In any case, as I read this, it's unclear whether Fermus lists at all, or if it does, how much it'll actually list for.
The Australian financial media has been beating the absolute shit out of it for months in a way that should embarrass the vast majority of journalists that have covered data centres in America and England, pushing back against basically every ridiculous claim and talking to sceptic after sceptic, mocking the company for its dodgy metrics and scrutinising the banks backing it.
A great example is Mark DiStefano of the AFR, who made the point yesterday morning that banks had, as mentioned, said the IPO was effectively filed at $44 billion, despite the fact that it was anything but, and that there'd be potential regulatory problems as a result.
Can you imagine any of this kind of pushback against Corweave, Nebius, Iron, or any of the other dogshit merchants raising billions to maybe build a data center someday?
No, no, no, no, we absolutely couldn't here in America.
It would be considered uncouth to point out their financial fragility.
In fact, if anything, we should help pump these stocks so they can raise more money to send to our glorious god, Mr.
Jensen Huang.
Firmus is set to go public in the next few weeks on October 23rd, but the rumblings are that it might not even make it out the door, and if it does, it'll be at a vast discount.
It's a sign that investors have finally started to see the AI bubble for what it is, a bunch of grifters trying to dump questionably valued assets onto an unsuspecting public under the auspices of innovation, kind of gussied up by the press.
I'll also add that basically every single problem and criticism that people have with firmness, revenue concentration, questionable delivery timelines, unbelievable debt load today and in the future, can be levied against every single American AI data center company without exception.
And that the only real difference is that some of those data center companies already had some, but not much capacity, built as a result of their cryptocurrency mining operations.
Corweave was smart to go public in 2025, and I think Lambda, another NVIDIA-backed Neocloud planning to do so in 2027, is going to have a few more problems.
The Australian coverage of firmas should be an embarrassment to the American finance and tech press, because it shows what actual journalism looks like.
As I read this sentence, I see a headline from Bloomberg about Corweave signing a deal with Adani Connects, you know.
That guy who was under massive fraud allegations.
But they've all gone away.
Thank you, our president.
In India, for 240 megawatts of capacity that won't come online until the middle of 2028, which is functionally identical to the promises made by Firmus.
Except, instead of saying that, the article chooses instead to talk about how core we've has, and I quote, been expanding geographically in order to boost available capacity and better serve global customers.
When all of this shit finally collapses, something has to fundamentally change about how the business and tech press does its fucking job.
The amount of times a neocloud or AI company has managed to get a glossy piece about some theoretical project as a means of raising more debt or venture investment off the back of press, unquestionably repeating their marketing collateral, is actively dangerous for investors and the general public.
It is very, very, very easy to see the problems in this industry, but I guess it's much harder to do so if you're intentionally choosing to ignore them.
Firmus is as bad as Corweave was and is as bad as Lambda.
Perhaps they have a little bit more infrastructure, but their problems are identical.
And I know that there are journalists who are listening to this who might be a little bit butthurt, but it's not my fucking problem or my fucking fault that nobody seems to be able to criticize these companies.
I challenge you, if you feel like your feelings are hurt, to go and read the coverage of Firmus if you cover AI data centers and see what the difference is between the American coverage and the Australian coverage.
Because it's distinct.
And had anyone bothered to take CoreWeave or IRON or Nebius or Lambda or any of the American ones seriously like the Australians have with Firmus, maybe we wouldn't be in this situation we're in today and maybe the future stock crash that happens, which fucks every investor, retail and otherwise, that is connected to a neocloud, maybe we could have avoided that.
We can't now.
So thankfully, it looks like Australian investors won't get harmed as much as American ones.
But when it comes down to the point when this stuff falls apart, when it comes to the point when people get hurt, people are going to ask who to blame.
And the answer is partially the media.
And if you remember of the media hearing this, maybe it's not about you.
Maybe you did your job.
Maybe you were critical.
Or were you?
Go and check your work.
Go and check whether you actually criticized and actually scrutinized and were an actual skeptic of these companies or whether you spent far more effort scrutinizing the scrutinizers.
Because that's how we get bubbles.
That's how hype cycles grow.
And that's how regular people get fucked.
Fucked as retail investors or those who are having their insurance funds put into these companies.
And guess what?
Guess fucking what?
You know who actually backed Vermis?
Blackstone's credit and insurance fund.
So when this dog dies, and it will.
It will be directly as a result of nobody really pointing that out and allowing and actually greenlighting and approving and celebrating companies like Blackstone sinking pension funds and insurance funds into these dodgy goddamn companies.
All of this could have been avoided, and my anger that you hear in my voice is because I've been saying it for years.
And I hope something changes as a result of this.
I will be calling for change.
I've been taking detailed notes.
Oh, how I have.
And I will, of course, be back next week with a great episode on Borns.
And, of course, another monologue.
It's always a pleasure to serve you.
Thanks as ever for listening.
I love you all.
How do you know that Claude won't become manipulative?
This is a constant worry.
And you can actually catch the model thinking, I think X is actually true, but I'm going to tell the user why.
I'm Walter Isaacson.
On my new podcast, The Builders, I'm going inside the minds of the people shaping our future.
Listen to The Builders starting October 13th on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
In October 2021, my brother David was diagnosed with pancreatic cancer.
A year later, he convinced me to make a podcast with him.
This podcast...
My biggest fear is that I am afraid of being forgotten.
My Brother David is the story of the last chapter of my brother's life.
It's weird and messy and vulnerable, and I'm going to share all of it with you.
Okay, so here we go.
Listen to My Brother David on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
There are thousands of podcasts that can tell you how to better yourself.
Get Worse with Kyle Pru is not one of those podcasts.
So if you're interested in getting thinner, going to therapy, starting peptides, setting boundaries, taking supplements, making your better, getting closure, then I would humbly recommend other podcasts.
If you're interested in blackmail, love bombing, cloning yourself, or getting revenge, then we've got a little something something for a dastardly individual like you.
Listen to Get Worse with Kyle Pru on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
Michael Lewis here to tell you about my new book, Blockers.
which gives you an inside look at the Trump administration and the public servants who stood in its way.
These were people who were securing our most sensitive data, keeping the public safe from all sorts of threats, and engaged in life-saving scientific research until they were told they no longer belonged.
And the question to me is, if they can't survive in our government, then what does it say about us?
Get Blockers now only at blockers.fm.
This is an iHeart Podcast.
Guaranteed human.