Nvidia in talks to invest hundreds of millions in Firmus after AI cloud firm’s IPO flop

A fresh Nvidia investment would reassure holders of neocloud debt and equity that the sector’s largest supplier remains willing to support it, even as public markets turn more selective. The flip side is that Nvidia backing companies that buy its chips may sharpen questions about how much AI infrastructure demand depends on vendor financing rather than independent capital, an issue that sits at the heart of the bubble debate Ken Griffin revived on Tuesday. For Nvidia shares, the amounts involved are small, so the signal matters more than the money. The episode also suggests the IPO window for AI infrastructure firms is narrowing, pushing more of them toward private and strategic funding.- When public investors walked away from Firmus, Nvidia appears ready to step in, a reminder that the AI cloud boom still leans heavily on its biggest supplier.Summary:Nvidia is in talks to invest hundreds of millions of dollars in Firmus Grid, according to The Information, as reported by Bloomberg (gated)The talks follow Firmus’s decision earlier this month to scrap an IPO that would have been one of Australia’s largestFirmus struggled to attract global investors, who have become more cautious on AI companiesNvidia is already an investor in Firmus and several of its peersThe move signals continued Nvidia support for neoclouds, a group of heavily indebted AI cloud providersNvidia did not immediately respond to a request for commentNvidia is in talks to invest hundreds of millions of dollars in Firmus Grid, an AI cloud company that abandoned its initial public offering earlier this month, The Information reported, according to Bloomberg.The discussions signal that Nvidia, the world’s most valuable company, intends to keep supporting so-called neoclouds, according to the report, which cited people familiar with the talks. Neoclouds are specialist providers that rent out AI computing capacity, competing with the large cloud platforms run by the biggest tech groups. Many have taken on heavy debt to buy chips and build data centres, and the sector has come under pressure as investors grow more cautious.Nvidia is already an investor in Firmus and in several of its peers. A spokesperson for the company did not immediately respond to a request for comment.The talks follow Firmus’s decision to scrap a listing that would have ranked among Australia’s largest. The company struggled to draw global investors, who have become more wary of AI companies, Bloomberg reported. Bloomberg News had previously reported that Firmus was weighing other funding options.The report adds to a mixed picture for AI infrastructure. On one side, demand signals remain strong: Super Micro Computer this week released a surprise update showing September-quarter revenue far ahead of its own guidance, and SpaceX chief executive Elon Musk said compute remains so scarce that older Nvidia chips now rent for more than when new. On the other, public investors are showing more selectivity, and Citadel founder Ken Griffin said on Tuesday that AI is almost certainly in a bubble.Nvidia’s willingness to back customers that buy its chips supports the neocloud model in the short term, but it also raises questions about how much of the sector’s growth relies on its main supplier. The size and terms of any Firmus investment, and whether other backers join, will indicate how much confidence remains in the neocloud business outside Nvidia itself. This article was written by Eamonn Sheridan at investinglive.com.