As redemption tales go, they don't come any bigger than that of Oliver Curtis.
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they → go → Curtis
Convicted of conspiracy to commit insider trading, he was sentenced to two years in prison.
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he → convict → prison
Sent to a relatively low-key facility in Cooma, where it is said he became a hairdresser for inmates, he was released after one year on good behaviour.
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he → send → behaviour
By next Friday, Oliver Curtis is expected to emerge a billionaire; the driving force behind one of Australia's biggest ever stock market listings, second only to Telstra's privatisation in the 1990s.
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Curtis → expect → 1990s
If all goes to plan, Firmus, the data centre builder and operator which has existed in various forms for just seven years, will raise $7.2 billion in new capital as part of the listing.
When added to the existing capital, the Singapore based Firmus will be valued at an incredible $43.7 billion.
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Firmus → go → billion
Already, it boasts some of the world's most powerful backers.
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it → boast → backers
US investment giant Blackstone has close to 7 per cent of the existing stock while chip giant Nvidia — which routinely vies for pole position as the world's most valuable corporation — holds slightly more.
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which → have → more
With more than 13 per cent of the company, he will officially cement his role on the rich list.
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he → cement → list
His father Nick, a pioneer of Australian critical minerals mining and the driving force behind Lynas Rare Earths, is also slated to profit handsomely from his 5.6 per cent stake.
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father → drive → stake
But the float, and the industry, has its detractors.
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float → have → detractors
Amid the ongoing investor frenzy for all things AI, there is a growing apprehension on artificial intelligence from governments globally while on the data centre front line, community opposition could dent the rosy forecasts for future earnings.
And then there are the financial risks, and the circular financing and interdependence within the industry; risks highlighted this week by the Reserve Bank of Australia.
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opposition → be → Australia
A past that continues to haunt
Oliver Curtis and business partner Tim Rosenfield have faced more obstacles than most in their quest to convince the globe's biggest tech players and investors to jump aboard the Firmus express.
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that → continue → express
There is the uncomfortable reality that neither has any experience running data centres or a background in technology.
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neither → be → technology
He and his former best friend from school, John Hartman, engaged in a cleverly planned and executed scheme to profit from insider trades.
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He → engage → trades
In 2007, just before the global financial system began its meltdown, Hartman approached Curtis with a plan.
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Hartman → begin → plan
Whenever his employer, investment group Orion, was about to engage in a large transaction, he would notify Curtis to trade in what is known as Contracts For Difference, which ordinarily are high risk instruments that routinely clean out investors.
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that → engage → investors
According to the evidence, over the course of a year, he engaged in these trades on 45 separate occasions, trousering a total profit of more than $1.43 million.
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he → accord → million
The then 21-year-olds split the profits with Curtis splurging on lavish gifts for his mate.
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Curtis → split → mate
But in 2009, not long after the corporate regulator began investigating Hartman, he spilled the beans and was the first to do time.
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he → begin → time
He has admitted in interviews that his time behind bars was tough and that it deeply impacted his family.
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it → admit → family
In the AI lexicon, Firmus is what's known as a neocloud.
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what → know → neocloud
Traditional data centres, the kind employed until now by the likes of Google, Meta, Amazon et al, are designed to handle a range of applications, everything from search engines to database management and content storage.
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centres → employ → management
Neoclouds are data centres equipped with Graphics Processor Units (GPUs) and specifically designed to cater to the needs of artificial intelligence.
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Neoclouds → equip → intelligence
And the key point of difference, the selling point, between Firmus and its rivals is an innovation that allows it to use a mere fraction of the water than that required by the existing technology.
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it → allow → technology
It also claims to have the lowest operating costs in the industry.
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It → claim → industry
Ask a question about what AI centres actually produce, and you'll be bombarded with constant references to "tokens".
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you → ask → tokens
And according to Firmus, their AI tokens are about the cheapest on the planet.
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tokens → accord → planet
It's that selling point that has attracted the likes of Meta and OpenAI as customers, Blackstone as an investor and Nvidia as a supplier and investor.
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that → attract → supplier
The company, however, is still making a loss.
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company → make → loss
And the planned rollout of its technology will require a huge amount of capital expenditure.
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rollout → plan → expenditure
Which is why it wants to list on the stock market.
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it → want → market
It hopes to turn a profit within two years, according to its prospectus, with about $US5 billion ($7.2 billion) in annual earnings from its data centres in Malaysia, Indonesia along with the centres it is developing in Tasmania.
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it → hop → Tasmania
LoadingWhat's to worry about?
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LoadingWhat → worry → ?
Stock markets live and breathe hype.
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markets → live → hype
There's been plenty of that with Firmus which, along with its well-heeled backers, have helped generate a whirlwind of FOMO among would be punters.
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which → be → punters
It's also created concerns among regulators.
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It → create → regulators
The RBA, back in July, said it was concerned that the huge spending spree on data centres may create shortages of workers, materials and capital, thereby adding to the inflation wave that has beset the economy.
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that → say → economy
This week, it added another concern.
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it → add → concern
In its Financial Stability Review, the RBA highlighted the threat to the global economy from so called neocloud companies, and particularly in the way they secure finance.
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they → highlight → finance
They invest in each other, and they buy products from each other.
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they → invest → other
…and 9 more, not listed.
The Aporia