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How I Invest · 3 min · Oct 28, 2026

SpaceX's compute buildout shows the value of anticipating shortages

GEGavin Ezekowitz · Co-Founder & Chief Investment Officer, BFA Global Investors

After passing on xAI at $25 billion, he points to rapid data-center construction ahead of a compute shortage.

In this episode

Full analysis
  1. 9:07Underwrite the team and milestones, not a distant market forecast6 min
  2. 29:19Venture returns require convexity, pacing and position sizingPro pick 6 min
  3. 48:09Avoid letting macro timing override your investment mandatePro pick 5 min
  4. 1:49Early AI markets can produce more than one leading company5 min
  5. 26:59SpaceX's compute buildout shows the value of anticipating shortages3 min
  6. 37:28Small funds can turn a focused founder network into an edge5 min
  7. 43:18Small initial stakes can dilute a fund's biggest winner3 min
  8. 1:06:49A manager's response to a mistake can end an LP relationship5 min
“In fact, I passed on XAI in that $25,000,000,000 early round. I just couldn't understand it.”
GEGavin Ezekowitzat 27:10 · How I Invest
27:10

Takeaways

  1. He passed on xAI's $25 billion round because he couldn't understand it.
  2. SpaceX built large-scale compute before supply caught up.
  3. He looks for entrepreneurs who anticipate future bottlenecks.

About this segment

After passing on xAI at $25 billion, he points to rapid data-center construction ahead of a compute shortage. He values entrepreneurs who spot a bottleneck early and build capacity before demand catches up.

GE

Gavin Ezekowitz

Gavin Ezekowitz is co-founder and chief investment officer of BFA Global Investors.

Built a career across capital markets and investment banking, then became a venture and growth investor.

From “Gavin Ezekowitz on AI Valuations, Asymmetric Returns, and Why Great Investors Fail”, Oct 28, 2026. Watch the full episode

Transcript

From the transcript How I Invest publishes with the episode.

  1. 27:12

    And it's not like I came at this as an adherent of the AI Elan approach or that was my thinking. In fact, I passed on XAI in that $25,000,000,000 early round. I just couldn't understand it. But what I would observe in that business, and I would observe in that we can take away from many others, is that there is an incredible capability of great technology entrepreneurs, great entrepreneurs in other sectors, but great technology entrepreneurs, to just figure out that there's a moment and they can swoop in.

  2. 28:01

    And I look at what Elon did in building out all of those data centers incredibly quickly, at an incredible scale, at a time where nobody was building 100,000 GPUs, and no one was doing anything like that. And then he arrives at this moment where we're just massively short compute and is able to charge a super premium to all these other companies to go and utilize that incredible asset. And I see this.

  3. 28:37

    You can look at it with the leadership of a number of technology companies. There is an incredible ability to understand where the world might be going and how to make some really intelligent bets on on that future state. These folks are not... It's not everybody, but it's also what I look for in venture managers, frankly, is that that ability to say, I... You know, it's great. You can tell me about, you know, what might happen in the next year or whatever.

  4. 29:05

    What's happening now? Kind of where do you see when you look at your portfolio? Where do you see the things that are going to work in three to five years? Five to ten years when the world arrives in the with your vision or how does that company play in? What are the factors here? Because to me, that's super interesting when when folks have that kind of mindset. That's most often where I get really excited.