Alex Davis on the past and future of growth investing, running Groq, and the pitfalls of the AI boom

Alex Davis recently raised $10 billion and plans to invest it in about 10 companies, with checks of up to $1 billion each. He’s doing it from Dallas, with a team of about 30 people and a firm, Disruptive, that has stayed out of the spotlight until now.

The new $10 billion fund puts Disruptive alongside the giants of tech investing, including Thrive Capital’s $10 billion-plus raise this year, split between early and growth investments, and Andreessen Horowitz’s $15 billion-plus haul across multiple funds at the start of this year.

Return data I’ve seen for Disruptive shows more than $6 billion returned on about $2 billion invested, alongside a reported historical net IRR of 94.1 percent. Davis’s public investments include Reflection AI, ElevenLabs, Shield AI, Databricks, and Helsing, with earlier bets on Palantir, Airbnb, and Spotify.

We discuss why he doubled down on Palantir before it went public, what he’s building at Groq after its $20 billion licensing deal with Nvidia, and the opportunities he sees in open AI models, compute, and defense technology.

I also ask where the AI boom goes wrong, from speculative data centers to investment vehicles promising access to private companies.

Timestamps:
00:00 Tech investing opportunities
01:22 AI valuations and market risks
06:23 The true cost of AI compute
09:33 Building Disruptive and its $10 billion fund
16:41 SPVs and the risks of private markets
25:50 How Disruptive helps its portfolio companies
33:36 The Palantir investment
39:43 Groq's NVIDIA deal and its future
45:45 The risks facing neoclouds
49:13 Alex Davis's family and founder story
53:15 The next big investment opportunities
57:32 What's wrong with venture capital
01:03:14 Why valuation isn't everything

Other links to the show:
Spotify: https://open.spotify.com/episode/6S8MBGXwogO0MDNRIRFbQN?si=wJxpX0LERFStrG-tBV30IQ
YouTube: https://youtu.be/dLPbh4Bm_lo
Substack: https://sources.news/p/alex-davis-disruptive-ai-10-billion-bet
Apple: https://sources.news/p/alex-davis-disruptive-ai-10-billion-bet

Thanks to the show’s premiere sponsors: @Atlassian, @meetgranola, and @mercury.