Deep dive: Firmus Technologies and its Project Southgate path to power
Introduction
Firmus Technologies (Firmus) is reported to IPO in September 2026 on the Australian Stock Exchange as a new, innovative offering of data centre for artificial intelligence (AI) training.
This deep dive seeks to provide insights into the assumptions underpinning its path to power to help investor capital allocation decisions.
I have purposefully kept AI revenue forecasts, immersion cooling versus other technology and further commentary about the personalities of Firmus’ leadership team out of scope in creating this report.
Personally, I wish this IPO was a routine affair in Australia, with say 4+ Firmus-shaped technology IPOs introduced each and every quarter. I hope their story inspires others to deploy first-principles thinking to complacency and push through the dark times for the chance of doing true work.
Read the deep dive and let me know what you think.
Best regards,
FTB
What is the opportunity and can Firmus capture it?
Firmus is positioning itself to be a company that can deliver AI training capacity by using Australia as the location for ‘AI school’ – bringing AI training to the location of the electrons, rather than demanding electrons be brought to training.
This AI-only breed of data centre is seeking to capture the widely reported insatiable demand for GPU compute. The thesis is: more energy enables more compute that leads to smarter, more sophisticated AI training and inference, which in turn, drives greater revenue.
The Firmus pitch hinges on solving the problem of needing to cool computation so the GPUs can deliver a higher level of performance. This problem is being exacerbated by the density of compute that AI training requires – high intensity bursts of power for the AI to learn ‘something’, such as how to drive a car.
A data centre needs to stay within a compliant temperature range to enable the GPU computation to happen. Before AI and the ChatGPT release date in 2022, this was achieved primarily through using air conditioners and fans to absorb heat from the server racks and remove it to outside the data centre to maintain safe operating temperatures. And as AMD, NVIDIA and AWS chips came into production, this brought about a vast increase in computation density and therefore more heat being created, which needed the cooling response to shift to more efficient methods, such as single-phase immersion, chiller-based direct-to-chip, 2-phase cold plate, and now with full-liquid immersion – which Firmus is targeting to deploy.
The Firmus story
Founded in 2019 in Sydney by Oliver Curtis, Tim Rosenfield and Jonathan Levee the company started out in bitcoin, where it was using immersion cooling to help improve the efficiency of running servers used for mining bitcoin tokens.
In circa 2023 it pivoted entirely by re-directing its interest in cooling server racks towards data centres housing GPUs for AI. Incidentally, this is the same origins and pivot as its Australian-American rival, IREN.
Firmus is now headquartered in Singapore, encouraged to relocate by ST Telemedia Global Data Centres, owned by the Singaporean Government investor, Temasek.
The IPO has been pushed back a few months to capture end of year accounts, with filings to the ASX to be carried out thereafter.
Firmus and the rest
For AI-only in Australia, Firmus has IREN as the key competitor who are in lock-step with NVIDIA and deploying its GPUs at sites in the United States and Canada. IREN announced in June 2026 they are to build their first data centre in Australia, a $10 billion 800 MW data centre in Bundey, 165km north-east of Adelaide, energised in 20281.
The leading data centre developers on mainland Australia such as CDC, AirTrunk, Goodman, DigiCo, NextDC, Macquarie Data Centres diversify their client base to those who require cloud and colocation solutions.
Immersion cooling technology has been deployed by IBM since the 1960s. And there are a number of companies who offer the liquid cooling data centre technology for AI compute such as Submer, Green Revolution Cooling, LiquidStack, and Vertiv.
What Firmus does, precisely
Strip away the beguiling marketing and this is what the money is going to:
Building 3 Firmus-owned data centres in Tasmania called ‘Project Southgate.’
Retrofitting its ‘HyperCube’ immersion cooling technology into existing data centres located across Australia.
Note this deep dive focuses on Project Southgate rather than unpacking HyperCube. My one question would be could it be used for hyperscalers making their own chips such as Amazon, Alphabet and Meta?
However, let’s unpack the plan to build 3 data centres.
Project Southgate – building the 588 MW data centre campus in Tasmania
Land has been acquired near Launceston to build the first stage of Project Southgate, a 100 MW data centre with 36,000 NVIDIA GPUs installed. The second data centre is much more ambitious, 288 MW or 500 MW (depending on the presentation) with an estimated 100,000 GPUs at George Town, and the third in Wesley Vale at 200 MW with ~75,000 GPUs. Bringing up the total of ~211,000 GPUs required from NVIDIA.
The proposed data centre campus is to be delivered under the build, operate, own, maintain model.
Path to power for Project Southgate – the risks and opportunity with the critical path
Its three locations across northern Tasmania for their first purpose-built data centres is genuinely smart. Launceston, George Town and Wesley Vale are cold ambient climate locations making it a more efficient site for cooling racks.
And as it happens, the location selected neatly sidesteps the very real and current power constraint issues playing out in metropolitan Sydney and Melbourne where it is extremely difficult to secure a 100 MW+ connection agreement, the scale of data centre required for AI training.
As recently as 17 June 2026, NSW network operator Transgrid published a letter to data centre proponents signalling metropolitan Sydney transmission is at capacity: 20260617-update-on-network-capacity.pdf
For Project Southgate, the state-owned energy retailer Aurora Energy has signed a three-year retail service agreement to supply up to 104 MW of electricity from Hydro Tasmania.
But read ‘104 MW contracted’ is capacity, not guaranteed firmed energy. The real question is whether Hydro Tasmania can serve a flat, 24/7 load – to overcome ‘dark and still’ – during 2026 - 2030.
Over the past two years, Tasmania has been in drought and there has not been enough water to pump up and dispatch down its hydro power stations, with the Tamar Valley Gas Station stepping in and generating 221 GWh in 2024 and 288 GWh in 2025, up from 71 GWh in 2023, a non-drought year, and relying heavily on Basslink by net importing 1,202 GWh in 2024 and 1,910 GWh in 2025 from mainland Australia (Source: Hydro Tasmania Annual Report 2024-25).
The lifeline for Firmus is the 750 MW Marinus Link which doubles the interconnection capacity between Tasmania and mainland Australia from 2030. However, Marinus Link is a shared, consumer-funded, two-way cable that moves energy rather than creating it. The interconnector’s business case is for the National Electricity Market, not to serve one large load customer. For instance, VicGrid write how Marinus Link unlocks Victoria’s access to Hydro Tasmania’s pumped hydro generation.
So, what does this mean?
I’m not sure the contract agreement is sufficient as currently agreed, as it is revealing an energy capacity gap when George Town is energised in 2028 – before the connection of Marinus Link.
Firmus could be relying on Tasmanian generation and storage projects via its 1 GW North West Renewable Energy Zone. But this REZ’s status is still ‘proposed’, not declared, or better yet, under construction. It requires legislation to be introduced into parliament for it to be declared. Which will be difficult to negotiate, as the Liberals are a minority government and rely on the crossbench for the passage of bills through parliament.
Firmus points to up to 5.1 GW of new renewables could be supported nationally, but it is not contracted or built and again, only 104 MW has been secured for its Tasmanian data centres.
For investors looking at Firmus, the capex bill required for additional generation for Project Southgate is the un-priced risk.
Until now.
Firmus needs to urgently review the following options.
Option one: underwrite renewable generation and storage projects either in Tasmania or on mainland Australia to fully offset its 588 MW electricity demand. This is the requirement for data centres as per Energy and Climate Change Ministerial Council meeting on 8 May 2026.
Firmus requires ~3 GW of new generation and storage costing ~$6 billion, against 104 MW actually contracted.
Or to use the other reported capacity figure for George Town – 500 MW, which requires 4 GW to offset at ~$8 billion capex cost (using same GenCost 2025-26 rates above).
But putting aside the cost, the more significant concern for investors is time to build the renewable generation and storage required for Project Southgate.
A very real stranded asset risk begins to emerge.
In the NEM, it is taking on average to execute origination, planning, connection, and construction:
BESS: ~2-4 years
Grid-scale solar: ~3-5 years
Wind (onshore): ~7+ years
This could materially delay the ambitions of St Leonards, George Town and Wesley Vale data centres – as it needs more than a DA through council, it needs to be matched with 3 or 4 GW of new power.
Or Firmus could look at option two - build gas peaking power behind-the-meter, which will be quicker to deploy and deliver the energy profile that the data centres require – flat, 24/7 load. It is already building over ~300 back-up diesel generators behind the meter at St Leonards and George Town (as per DA documents), why not commit a bit further?
So far so good, $1.06 - 1.4 billion versus the ~$6 or 8 billion for renewables plus storage offset. And the time to construction is realistically 3-5 years with the binding constraint being the gas-turbine procurement supply chain due to backlog of orders at GE Vernova, Siemens and Mitsubishi.
But the very real constraint is there is only 1 pipeline supplying gas to Tasmania with a total capacity of 129 TJ/day, already serving the Tamar Valley Power Station.
New gas stations at full load would need more gas than the existing pipeline can carry – 588 MW would draw ~154 TJ/day and 800 MW ~209 TJ/day. To overcome this, Firmus may have to underwrite a new gas pipeline, alongside the fibre cable it is building to mainland Australia.2
And as proposed, if no generation and storage is secured in a timely fashion, Follow the Bottleneck analysis shows that once all three data centres are built:
In a drought year such as 2025, Firmus could be consuming ~61% of Hydro Tasmania’s generation from its 30 hydro power stations and its sole gas-fired power station.
In a non-drought year such as 2023, Firmus could be consuming ~49% of Hydro Tasmania’s generation.
(Source: Table 3: Generation Summary 2019-2025, page 29 Hydro Tasmania Annual Report 2024-25).
If I was an investor in Firmus, I would want a much sharper picture for the path to power for Project Southgate to understand the capex required, timelines to energisation and options to mitigate the risk of a stranded asset.
More broadly, this is an inflection point for Australia. It has already begun as hushed whispers in between sessions at energy conferences but I am calling it out, and dropping the dead possum on the table: Australia is no longer in an energy ‘transition’.
To accommodate population and industrial load growth and AI – we need it all. No matter the source, the energy reality in this country is now ‘all of the above’.
If you would like to discuss this deep dive further, I can be contacted by email: info@followthebottleneck.com.
Not investment advice. This article uses public information only and its content is general in nature.