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.

Yet, Davis argues the same exuberance driving landmark transactions at the chip level is also fueling excess elsewhere in the AI stack, particularly among third-party data-center developers betting on what he called the “build it and they will come” model.

“If you’re a hyperscaler, you will own your own data centers,” Davis wrote in the letter. “We want to back the owner-users, not the speculative landlords.”

The risk, as the venture capitalist sees it, is not that demand for AI compute disappears, but rather that capital has rushed into the wrong hands. While hyperscalers and well-capitalized tech companies can absorb massive upfront costs, speculative landlords rely on short-term financing and customers that may never materialize at scale.

Davis didn’t name names in his letter, but if you follow his distinction about “speculative landlords” versus “owner/users” like Microsoft and Meta that will eventually build their own facilities, the most obvious targets could be the legacy wholesale giants like Digital Realty and Equinix.

Structured as something called “real estate investment trusts,” these companies generate returns by developing and leasing capacity to the same tech giants Davis predicts will soon cut out to capture margins themselves. If that shift accelerates, it could leave landlords facing refinancing pressure just as a wave of debt comes due, even if overall demand for AI compute continues to rise. That imbalance, he warned, could place significant stress on private credit markets and ripple outward if financing conditions tighten.

Equinix did not immediately respond to Fortune’s request for comment. Digital Realty wrote to Fortune after this article was initially published that they are a “long-term partner to hyperscalers,” and that they focus on location-specific markets where where infrastructure “can’t be easily substituted.”

Davis’ argument echoes warnings made on the other side of the aisle, including the thesis of famed short-seller Jim Chanos, who explicitly bets against “neoclouds” and converted crypto-miners like Cipher Mining. Chanos has argued that data center hosting is becoming a “commodity business,” warning clients that “the magic and the money is going to come from what the chips produce ultimately, not where they reside.” Both investors seem to agree that while the AI technology itself is valuable, the third-party landlords rushing to house it are walking into a trap.  

Yet the caution is startling coming from Davis, who said in the letter that he remains deeply bullish on AI itself. Disruptive has deployed billions of dollars across private technology companies it views as core to the AI economy, including Groq, open-source model developers, and defense-oriented software firms. Davis describes the current wave of AI innovation as a “once-in-a-lifetime” opportunity.

“While I continue to believe the ongoing advancements in AI technology present ‘once in a lifetime’ investment opportunities, I also continue to see risks and reason for caution and investment discipline,” he wrote.