The singer, Davis's close friend and protégé, was found dead in the bathtub at the same hotel just hours before the event was due to start.
Houston was scheduled to perform at the party after rehearsing with Brandy and Monica earlier in the week, The Mail On Sunday reports.
Guests are said to have arrived on the red carpet downstairs while Houston's body remained upstairs in her fourth-floor hotel suite.
Kim Kardashian, Britney Spears, Diana Ross, Sir Richard Branson and Kelly Rowland all attended the event as Beverly Hills police officers continued investigating Houston's death.
Meanwhile, Kelly and Sharon Osbourne and Miley Cyrus all decided to stay home, each tweeting that they didn't feel the party was appropriate given the circumstances.
Speaking at the event, Davis said: "I personally [feel] devastated by the loss of someone who has meant so much to me. She was full of life, looking forward for tonight. She loved music and she loved this night that celebrated music.
"Whitney was a beautiful person and she had a talent beyond compare. She graced this stage so many times. So simply put, Whitney would have wanted the music to go on."
Alicia Keys was earlier spotted comforting Davis as she arrived at the hotel.
Producer Jimmy Jam said: "The fact that it happened on this day, this event is where Clive Davis introduced Whitney to the world. We said hello to Whitney at the Clive Davis [gala] it may be appropriate we're saying our first goodbyes to Whitney at a Clive Davis event.
"In a weird way it's appropriate, the show must go on. I think Whitney would have wanted that to happen. Tonight I think we begin to celebrate and remember."
Click through the gallery below to see Whitney Houston's life in pictures:
> Whitney Houston death: Jennifer Hudson to pay tribute at Grammys
> Whitney Houston 'found dead in bathtub'
> Whitney Houston 1963-2012: Obituary
> Whitney Houston 1963-2012: Reactions