The government has said it will launch a consultation into the privatisation of the channel, which was founded in 1982.
Channel 4 is currently owned by the government and receives its funding from advertising but could be sold off to a private buyer.
Speaking at the Banff World Media Festival in Canada, Davies said we are “looking at very dark days here”.
He said the channel’s remit “which is to make shows like It’s A Sin” would change if it were to be sold.
“It exists to make this kind of drama and that’s going to fall away now,” he said.
“Come back in 10 years and you’ll see. I can’t promise we’ll be here to talk about this sort of programme on Channel 4 for much longer because the government is gutting it.”
It’s A Sin tells the story of a group of young friends living in London through the HIV/Aids crisis in the 1980s and its impact on the LGBT community.
Channel 4 previously said the series drove its streaming service to record growth.
Culture secretary Oliver Dowden said earlier this week the consultation into privatising Channel 4 is aimed at ensuring the broadcaster “keeps its place at the heart of British broadcasting”.
Davies said he is “very lucky to have a history” with Channel 4 and the broadcaster is “responsible for my entire career”, citing his 1999 drama Queer As Folk.
“If you think back to 1999, that was a revolution,” he said. “No other channel would have made that then.
“In some ways, literally the remit of Channel 4 is to look for different voices, different stories and part of the government’s thinking in selling it off is we now have more choice because we have streamers, we have Netflix, we have Amazon.
“We have more choice, but that means more choice of zombies, ghosts and detectives. They certainly don’t make this kind of stuff.”
He compared the consultation into the sale of Channel 4 with the sale of Cadbury’s.
“We all go, ‘It’s not as nice as it was’, and we don’t riot in the streets, we give up because we’re too busy staring at our screens,” Davies said.
“That’s what they’ve done, they’ve ‘Cadburyed’ it. They’re going to Cadbury the entire channel.”
Channel 4 boss Alex Mahon said earlier this week (via The Independent): “I think, in any examination of [privatisation], we’ve got to be clear that it’s about – as the Secretary of State said to the select committee – about making Channel 4 stronger.
“My question would be: what’s the analysis to show what makes us stronger?
She continued: “We’ve always got to be careful of doing anything that might be irreversible, that could possibly damage some of those things that we do for the sector, and that we do for the UK.