NEXTDC's share price collapses

Data centre operator NEXTDC saw shares fall forty-two percent in a single day after revealing delays in power infrastructure for its West Footscray expansion would cut future earnings by a third.

Community action stops power poles

Residents in West Footscray used civil disobedience, parking cars in the street to deny trucks access, halting industrial-scale power poles needed to feed the data centre's next expansion stage.

Firmus IPO collapses at valuation

AI data centre company Firmus abandoned its initial public offering after large investors refused to buy shares at eleven dollars each, which would have valued it at about forty-four billion dollars.

Proposed valuation exceeded major firms

At forty-four billion dollars, Firmus would have been one of Australia's twenty largest firms, more valuable than toll road operator Transurban and supermarket giant Coles.

Multiple factors sank the float

Beyond valuation concerns, Firmus faced growing community opposition to power and water-hungry data centres, fears about AI job losses, and voter unhappiness about economic instability in US and Australian election cycles.

Data centres lack social licence

AI and data centre companies evolved from medium-sized warehouses to massive facilities closer to homes, becoming the physical manifestation of people's fears about AI. Residents see minimal post-construction jobs and rising power bills.

Sector faces higher costs but survives

Analysts at Morningstar note NEXTDC's assets remain in great demand. Community concerns will increase costs and push new facilities further from built-up areas, making existing data centres even more valuable.

“However, this will affect all developers, will likely be factored into new contracts, and will likely make existing data centres even more valuable.”