Disruptive Closes $10 Billion Fund for AI and Defense

Dallas-based venture capital firm Disruptive has closed a $10 billion fund to invest in artificial intelligence, defense, and software companies, according to Bloomberg. The new capital nearly doubles the firm's assets under management.

The firm plans to back around 10 late-stage companies, deploying roughly $1 billion per company. Most of the money will go toward new funding rounds, while a portion will be used to buy shares from existing investors. The fund marks a shift in how the firm operates; previously, it raised capital deal by deal through special purpose vehicles (SPVs) that pooled investor funds for a single investment, whereas now it will manage one large fund and choose where to invest itself.

Founder Alex Davis said startup founders are tired of special purpose vehicles that often do not disclose who is behind them, adding that the world's best companies choose who they want to invest in them. He noted that large checks have become necessary because successful companies are staying private longer, stating, "We can't write small checks." The firm has about 30 employees and is located outside major US startup hubs, with a portfolio that includes ElevenLabs, Databricks, and Shield AI.

Among its notable investments is Groq; late last year, Nvidia agreed to a $20 billion deal to license the chipmaker's technology and hire most of its staff, handing Disruptive an early return. In a letter to investors, the firm said it returned over $6 billion on roughly $1.9 billion invested, according to documents reviewed by Bloomberg. Disruptive declined to comment on its returns. Defense has become a growing target for startup investors, with European companies like Helsing raising large sums.

What do these terms mean?

Special Purpose Vehicle (SPV): An entity created for a single specific investment, pooling investors' money for that transaction instead of maintaining a permanent multi-investment fund.

Late-Stage Funding: Capital rounds injected into a company that has moved beyond the startup phase and proven its product, typically used for scaling before an IPO or acquisition.

Assets Under Management (AUM): The total market value of funds managed by an investment firm or fund on behalf of its clients.

Venture Capital Fund: An investment vehicle that pools capital from investors to purchase stakes in high-growth startups in exchange for higher risk.