Firmus, a “neocloud” company, specialises in renting out computer chips designed for processing artificial intelligence tasks. The firm plans to operate its proprietary equipment within third-party data centres, including those managed by CDC Data Centres. Its most significant development is located in Batam, Indonesia, projected to house 170,000 Nvidia chips, a scale approximately ten times larger than its Melbourne operations. Bank of America anticipates this Batam facility alone could generate US$2.9 billion in revenue during the second half of the 2029 financial year.
Analysts at Bank of America view CoreWeave, an established neocloud provider, as a key comparable for Firmus, given their similar focus on digital infrastructure, customer base, and close ties with Nvidia. CoreWeave, which builds and rents cloud infrastructure for AI, reported US$7.59 billion in revenue for the year to June 30, marking a 115.3 per cent increase, though losses widened to US$626 million. The Wall Street giant estimates Firmus’s enterprise value at US$75 billion, including US$20 billion in debt, suggesting it should trade at a 25 per cent discount to CoreWeave due to its earlier scaling stage. Firmus is strategically positioned to service the burgeoning Asia-Pacific AI data centre market, expected to be the largest globally by 2028.
However, investor sentiment is divided. Concerns centre on Firmus’s lack of a track record and its substantial reliance on Nvidia for high-end chips. There are also worries that these chips could quickly become redundant as AI technology evolves. Michael Frazis, CEO of Frazis Capital Partners, highlights issues with heavily leveraged project financing, noting that assets depreciate quickly while interest payments can significantly exceed initial costs. He points out Nvidia’s annual chip launches mean older chips could be devalued long before Firmus’s standard six-year depreciation period concludes, potentially eroding the capital base.
Bank of America, despite its lofty valuation, also offers caveats. The bank notes Firmus currently serves a small number of customers, and its success hinges on the efficient rollout of its facilities. Furthermore, the limited financial forecasting provided by Firmus beyond the immediate future introduces significant uncertainty into long-term projections, prompting analysts to caution clients against over-reliance on such extended estimates.
