Waymo borrows $5 billion in the same week Firmus abandons a $5 billion IPO at a $30 billion valuation

Waymo's lenders agreed on a spread. People familiar with the matter told Bloomberg the loan priced at 5.25 percentage points over the benchmark rate ^[5], and Quartz reported the debt was expected to carry no credit rating ^[4]. Waymo began negotiating in early September with a target of more than $3 billion and finished at $5 billion ^[3], so the book grew by as much as two-thirds over the opening ask ^[33]. Goldman Sachs was sole lead bookrunner, with PIMCO, Blackstone and Sixth Street in the lead syndicated roles and ten other firms, including Capital Group, T. Rowe Price, Apollo and Oaktree ^[2].

Firmus's would-be shareholders were asked for a multiple. The company planned to raise about $5 billion at A$11 a share, a price that valued it at around $30.6 billion, CNBC reported ^[15]. The Taipei Times put the figure at $30 billion, up from $10.5 billion less than three months earlier ^[14], a step-up of about 2.9 times ^[29]. Against revenue of $51 million in the 2026 financial year ^[17], $30 billion is about 590 times sales ^[30]. Against capacity the ratio is harder still. The pipeline is 912 megawatts, of which 46 megawatts has been built ^[18], about 5% ^[31], so the offer valued Firmus at roughly $650 million per megawatt built ^[32].

At 5.25 points on the full $5 billion, Waymo's spread alone comes to about $262.5 million a year before the benchmark rate is added ^[34]. Firmus's revenue for its entire 2026 financial year was about a fifth of that ^[35].

What the lenders were underwriting

The loan goes to a company that already sells rides. Waymo carried more than 500,000 fare-paying trips a week across 14 cities as of early September and is targeting 1 million a week across 20 cities by the end of the year ^[8]. It had roughly 4,000 vehicles in domestic service in May ^[9].

Beneath the loan sits a large equity layer. In February Waymo raised $16 billion at a $126 billion valuation, and Alphabet kept its position as majority investor ^[7]. The loan equals about 4% of that valuation. Because it is Waymo's first debt ^[1], the private mark would have to fall by roughly 96% before the $5 billion exceeded it on paper ^[36].

None of the three reports on the loan describes collateral or covenants, so whether the lenders hold a claim on Waymo's software, its fleet or only its promise to pay is not on the record. The known risks are public. The National Highway Traffic Safety Administration has opened an investigation into how Waymo robotaxis behave around school buses and another after one hit a child near a school in Santa Monica ^[10]. The National Transportation Safety Board opened its own school-bus investigation earlier this year ^[10]. We think a margin of more than 500 basis points on an unrated loan ^[4] is the price of those open investigations and of a borrower with no debt history ^[1].

Steve Fieler, Waymo's chief financial officer, wrote in a blog post: "Our strong momentum has enabled us to complement our equity financing with debt, providing additional financial flexibility to strengthen our balance sheet" ^[6]. The loan arrives eight months after the February round ^[7] and adds $5 billion of cash without adding shareholders at the $126 billion mark ^[1]. Quartz places it beside Uber's 2016 debut in debt markets, a $1.15 billion leveraged loan raised ahead of its IPO ^[11]. Waymo's loan is about 4.3 times that size ^[40].

What the IPO buyers declined

Firmus's board blamed the market. "Having considered recent market volatility and prevailing market conditions, the board determined that the terms on which the offer could proceed would not appropriately reflect the strength of the company's business and long-term growth outlook," the company said ^[13].

UniSuper's chief investment officer blamed the price. "So much has to go right to justify the valuation," John Pearce said in an investor update published Thursday ^[20], the day before Firmus withdrew ^[12]. The Taipei Times reported that part of the difficulty was persuading buyers of the steep rise in value for a company without a proven track record ^[17], and Bloomberg reported that some investors worried existing shareholders would sell soon after a debut ^[21].

"Investors just weren't prepared to pay a sky-high price up front for capacity that's still largely on the drawing board," said Josh Gilbert, eToro's lead analyst for APAC and the Middle East ^[19]. "The timing hasn't helped either, with higher yields lifting borrowing costs and shrinking what investors will pay today for earnings that sit years down the track," he said ^[19].

The board's account and Pearce's make different predictions. If volatility was the problem, something near $30 billion should clear once markets settle ^[14]. If valuation was the problem, the next price Firmus accepts will sit well below it, closer to the $10.5 billion of its August round ^[16].

Higher yields reached both deals. Waymo's lenders take theirs as a benchmark plus 5.25 points ^[5]; Firmus's prospective shareholders would have taken theirs as a discount on earnings years away, in Gilbert's description ^[19]. Credit for AI is getting dearer too. Nearly $500 billion of new debt has been priced this year to fund AI infrastructure, the Taipei Times reported, and rising financing needs and rates have pushed up credit-insurance costs and weakened tech debt performance ^[25].

The private round and who is already in it

Firmus said it "will now pursue capital from the private markets and consider alternative public and private market options" ^[27]. Bloomberg, as relayed by Quartz, reported that the company and its advisers are talking to current investors about a round of $2 billion to $3 billion that could blend equity and debt, and that it is unclear whether Nvidia would take part ^[22].

Existing investors had already planned to supply roughly half of the IPO's roughly $5 billion ^[23], or about $2.5 billion ^[37]. The private range brackets that figure. In our view the money that failed to arrive this week was the other half, or rather the roughly $2.5 billion Firmus needed from buyers who were not already shareholders ^[37]. The round now under discussion looks largely like the insiders' share in a new structure.

A $2 billion to $3 billion round is 40% to 60% of the IPO target ^[38], set against 866 megawatts of pipeline still to build ^[39]. The Taipei Times described Firmus's business model as hinging on a steady influx of fresh capital ^[24]. The company has raised in steps: $505 million led by Coatue Management in April, then $2 billion pledged by a group including Nvidia and Blackstone, with Jane Street among its backers ^[28]. With the listing application withdrawn ^[12], the build schedule now depends on the size and timing of private rounds.

Firmus does hold a contract a lender can examine. It signed agreements with Meta last month to provide GPU computing capacity at its Southeast Asian data centers ^[26]. We'd expect a debt-heavy blend to lean on those agreements, and its terms will show how much credit one large customer can support at a company with $51 million of annual revenue ^[17].

Blackstone appears in both deals, as a lead lender to Waymo ^[2] and a backer of Firmus's $2 billion August round ^[16]. The IPO asked a different set of buyers to accept Firmus at nearly three times that August price ^[29].

Where this could be wrong

Three outcomes would change this account. Firmus could close its private round at or near $30 billion with a real share from new investors. The board's volatility explanation would then hold, and the public objection would look like one about insider selling after listing ^[21] more than value. The lenders may also have been underwriting Alphabet's majority ownership ^[7] more than Waymo's own business, in which case the loan says little about how credit treats a standalone technology company. And if Waymo misses its 1 million weekly rides target ^[8] or the federal investigations widen ^[10], lenders will have set the 5.25-point spread ^[5] too tight.

We think the two deals sorted on what a buyer could count on the day of pricing and how much equity sat beneath them. Waymo offered paid rides and a $126 billion equity layer under a loan worth about 4% of it ^[36]. Firmus offered 46 built megawatts and $51 million of revenue against a $30 billion price ^[18][17][14]. If Firmus raises its round largely as debt from new lenders at a valuation near $30 billion, credit will have funded a pipeline that public equity buyers declined, and the distinction drawn here would not hold.