Disruptive closes $10B fund, plans $1B checks for AI and defense startups

Dallas-based investment firm Disruptive has closed a $10 billion fund, one of the largest venture raises this year, with plans to invest up to $1 billion in at least 10 late-stage companies. The firm, which has previously backed companies like Palantir, Airbnb, and Spotify, is focusing on AI and defense—sectors where startups often require significant funding to scale.

This is Disruptive’s first fund where investors commit money without knowing which companies will receive it. Previously, the firm raised capital for individual deals, giving investors clarity on where their money was going. The change suggests the firm is confident in its ability to deploy large sums, though it also introduces uncertainty about how these investments will perform.

Earlier this month, The Wall Street Journal reported that Disruptive was raising the fund and had already secured $7.5 billion. TechCrunch confirmed the final close on Tuesday, noting this is the largest venture fund ever raised in Texas. Disruptive was started in 2012 by Alex Davis, whose grandfather was billionaire oil magnate Marvin Davis. The firm has since gained attention for backing companies in industries that often spark debate.

Disruptive’s recent investments include Groq, an AI chip startup, and ElevenLabs, which develops voice-generation technology. According to Bloomberg, the firm has delivered strong returns, generating over $6 billion from about $1.9 billion deployed so far. This track record may have helped attract investors to the new fund. The firm’s focus on AI and defense aligns with trends in venture capital, where firms are increasingly willing to fund companies with high capital needs and long development timelines.

The $10 billion fund comes at a time when some AI startups are raising large sums. For example, DensityAI, an AI chip company founded by former Tesla Dojo executives, is reportedly in late-stage funding talks at a potential $10 billion valuation, as we covered last month. Meanwhile, AI coding firm Cognition recently raised $2 billion at a $48 billion valuation, showing how some startups are securing substantial funding. Disruptive’s approach—writing checks large enough to influence entire markets—could either help these companies grow faster or create challenges if the funding outpaces their needs.

Defense is another area of interest for Disruptive, a sector that has seen more venture capital activity as global tensions increase demand for advanced technologies. The firm’s past investment in Palantir, which works with government agencies, suggests it has experience in this space. Whether Disruptive can replicate that success with its new fund remains unclear, especially as other firms also increase their investments in defense.

The fund’s size and structure also raise questions about the future of venture capital. Investors in this fund are trusting Disruptive’s judgment without knowing which companies will receive funding—a model that works for established firms but carries more risk for newer ones. Disruptive’s reported returns may have eased some concerns, but the shift from individual deals to a large fund still represents a bet that the firm can identify and support the next generation of major companies.

What happens next will depend on Disruptive’s early investments. With checks of up to $1 billion, the firm has the ability to shape entire sectors—but also the potential to fund startups before they’re ready for such large sums. If the fund’s early bets succeed, it could strengthen Disruptive’s position as a firm capable of backing high-impact companies. If they struggle, it may lead to discussions about whether such large checks are helpful or harmful in venture capital.

Sources: techcrunch.com