Dec 29, 2025 - Business

Exclusive: Groq investor sounds alarm on data centers

Dan Primack

Animated illustration of a glowing data center with four bolts of lightning feeding electricity into it. — Illustration: Brendan Lynch/Axios

Venture capitalist Alex Davis is "deeply concerned" that too many data centers are being built without guaranteed tenants, according to a letter being sent this morning to his investors.

Why it matters: This critique is coming from inside the AI optimist camp.

Davis' firm, Disruptive, recently led a large investment in AI chipmaker Groq, which then signed a $20 billion licensing deal with Nvidia.
It's also backed such unicorn startups as Reflection AI, Shield AI, Databricks, and Gecko Robotics.

What he's saying: "The 'build it and they will come' strategy is a trap. If you are a hyperscaler, you will own your own data centers. We foresee a significant financing crisis in 2027–2028 for speculative landlords."

He adds that data center buildouts will put too much "stress on the system."

The bottom line: Data centers are becoming political flashpoints, primarily because of their impact on electricity prices.

Now, the investment community is also asking questions.

Read the full letter:

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Exclusive: Groq investor sounds alarm on data centers

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