Firmus Technologies, Maas Group and Megaport tipped as Australian winners from global AI investment boom

For Australian investors, the biggest problem with the AI boom is that most of the companies making fortunes are listed thousands of kilometres away on Wall Street.

But Australia’s economy is also sitting on the edge of one of the biggest capital-spending booms in history.

The AI build-out has already created billionaire wealth winners over a matter of years and is set to spread across the broader economy as the infrastructure needed to power the technological revolution is constructed.

According to fund managers, the trick for local investors is to stop looking for the Australian company that will invent the next ChatGPT and start looking for companies getting paid to build and operate infrastructure that makes AI services possible.

Firmus tipped to be top 20 company by market value

Wilson Asset Management portfolio manager, Tobias Yao, says Australia’s opportunity is less about inventing AI and more about owning the infrastructure, electricity, commodities and connectivity needed to make it work.

The fund manager was an early investor in Firmus Technologies. Founded in 2019, Firmus is now Australia’s hottest bellwether for the AI mania and has raced from zero to a $15 billion-plus valuation in just a few years.

The company plans to build data centres - known as AI factories - to power large-scale AI computer services

It falls into a group of businesses called neoclouds, and this week it signed a deal to provide computing capacity to ChatGPT maker OpenAI from two planned data centres in Malaysia.

For now, Firmus is a private company, but Yao says there’s already a way to gain direct exposure to its growth through the ASX.

Maas Group

ASX-listed construction and mining services company Maas Group was founded by former South Sydney Rabbitohs second-rower Wes Maas. His company now owns 3.2 per cent of Firmus via early investments.

In fact, Maas Group’s stake in Firmus now is worth around $480 million. If Firmus achieves a mooted $30 billion valuation at its initial public offer, the stake’s value jumps to $960 million.

“They’re a couple of obvious AI beneficiaries,” says Yao. “AI factories like Firmus and those that are part of the building process like Maas Group.

“Maas also has a relationship with Firmus and is strategically positioned given it owns a lot of Firmus shares and its JLE electrical business builds the power cubes for Firmus.”

Maas has also been awarded more than $1 billion in contracts by Firmus to build the electrical infrastructure for planned data centres in South Australia and Tasmania.

Its shares are up 35 per cent over the past year to $5.96, as investors weigh the benefits of its fast-rising stake in Firmus against a risky pivot from residential and mining construction into digital infrastructure.

Both businesses have colourful founders.

Firmus is run by Oliver Curtis, a convicted insider trader turned AI evangelist, who’s married to famous public relations guru Roxy Jacenko.

Wes Maas’ career has taken him from rugby league to mining sites and internet services.

The three entrepreneurs are now betting the sprawling AI build-out will continue to compound their wealth.

“Firmus is signing these incredible contracts and has locked up the likes of Nvidia and OpenAI, which is unprecedented in Australia and really is a tremendous achievement,” says Yao.

“People are now coming to terms with just how large this business could be, and Oliver Curtis has really been a trailblazer.

“We also think Australia as a country is really well positioned for AI factories and compute development. It has all the right elements to put it all together. It’s a generational change.”

Yao adds that he thinks demand for AI services should continue to rise as the technology becomes more intelligent and new use cases emerge.

That means Maas Group’s pivot into AI services and backing of Firmus may prove a profitable bet over the next five years.

Firmus itself is tipped to target an ASX listing as soon as October. The float could be among the biggest in history and instantly make it among the nation’s 20 most valuable public companies.

Other AI bets

The potential for AI to turn previously sleepy corners of the Australian share market, such as Maas Group, into beneficiaries of a vast investment cycle is also showing up in commodity prices.

Copper hit a record high of $US6.70 a pound on Monday. Its rally is on bets that demand for the metal will outstrip supply over the next decade.

Sean Sequeira, chief investment officer at Australian Eagle Asset Management, says it’s no secret that mining giant BHP is benefiting from its exposure to copper.

“Everyone has got BHP as it’s big in copper,” he says. “Rio is also pretty big in copper. Even some of the gold companies, Evolution Mining and Newmont, have some copper.”

The metal is required for the electrification of data centres, vehicles and renewable energy infrastructure. The constrained supply is pushing prices higher and has already delivered capital gains for Australian investors who own copper miners.

Sequeira says uranium and lithium miners have also tracked the performance of baskets of AI-linked technology businesses higher, or lower, on the share market.

“There is a lot of battery energy storage demand from AI data centres and a lot of incremental demand coming from that sector,” he says.

Megaport touted as AI winner

Both stock pickers also own internet connectivity business, Megaport, in their funds. They see it as a winner from the soaring demand among companies for AI computing power.

Megaport shares traded as low as $6.48 last April, but have since nearly tripled in six months to close at $17.15 on Tuesday.

The rally has lifted its market value by around $2.5 billion in six months to $4 billion.

Yao says demand for AI computing and internet services is driving a dramatic increase in new customers for Megaport.

“So we’ve just started to see this trend in the US, and it’s happening in Australia,” he says.

“Megaport is a global business, but I guess it’ll take a bit of time for Aussie investors to realise they’re at the intersection of this trend.”

Sequeira adds that most of the investment focus in Australia is on the physical infrastructure-style businesses linked to AI.

They also include ASX-listed data centre players NextDC and Macquarie Technologies.

But if investors want direct exposure to providers of AI products, they will have to look to Wall Street and the likes of Microsoft, OpenAI, or Anthropic.

“The explicit exposure via chip stocks in the US or Asia we also don’t have in Australia,” he says.

But as hundreds of billions of dollars flow into AI infrastructure over the next decade, the biggest local winners could emerge far beyond the providers of the technology.