One of the most aggressive backers of the AI boom—whose firm most recently facilitated Nvidia’s largest deal ever—has issued a warning to the rest of the market: The “build it and they will come” approach to data centers is a dangerous gamble.
Alex Davis, chief executive of Austin-based investment firm Disruptive, wrote in a letter to investors he expects a “significant financing crisis” to hit the speculative data-center market as soon as 2027 or 2028, driven by extreme capital expenditure and a growing mismatch between who is constructing AI infrastructure and who will ultimately use it.
“We are seeing way too many business models (and valuation levels) with no realistic margin expansion story, extreme capex spend, lack of enterprise customer traction, or overdependence on “roundtrip” investments – in some cases all with the same company,” Davis wrote.
Davis’ warning was first reported by Axios.
The warning comes just days after Nvidia agreed to license assets from Groq, a high-performance AI chipmaking startup Disruptive has backed since its founding (not to be confused with Grok, Elon Musk’s AI chatbot). The transaction, which Davis has said is valued at roughly $20 billion in cash, represents the largest deal Nvidia has ever completed and underscores how aggressively the company is moving to lock up all the verticals in AI talent and intellectual property.
