Firmus Technologies, a developer of artificial intelligence (AI) data centres, plans to raise A$7 billion from investors on the Australian Securities Exchange on October 23.

The float values the company at up to $43.7 billion. That makes it the second-largest initial public offering (IPO) in Australian history, after Telstra in 1997.

But many investors doubt Firmus is worth that much.

The company is losing money. And only about 5% of the capacity it has sold is up and running, compared with roughly a quarter for rivals such as NextDC. Yet it would be valued at about four times NextDC, Australia’s largest listed data centre company.

We have yet to see the company’s financials — including current and forecast revenue, debt levels, or the cost of building the data centres — which should be released in the company prospectus on Thursday.

Late on Wednesday, a media report said the company’s bankers were even considering lowering the announced offer price.

Why the Firmus IPO is raising eyebrows

Firmus is controversial for several reasons.

First, its track record is short. Only two of its data centres are currently operational. The rest are still in the planning or construction phase.

Second, there is a public backlash in Tasmania. Locals say they were not properly consulted about its three giant data centres.

Third, there is its leadership. The two co-chief executives are cousins. One of them, Oliver Curtis, is a former investment banker who went to jail for insider trading a decade ago.

The team has shown it can raise money. It is less clear it can........

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