Background De novo inference of clinically relevant gene function relationships from tumor RNA-seq remains a challenging task. Current methods typically either partition patient samples into a few subtypes or rely upon analysis of pairwise gene correlations (co-expression) that will miss some groups in noisy data. Leveraging higher dimensional information can be expected to increase the power to discern targetable pathways, but this is commonly thought to be an intractable computational problem. Methods In this work we adapt a recently developed machine learning algorithm, CorEx, that efficiently optimizes over multivariate mutual information for sensitive detection of complex gene relationships. The algorithm can be iteratively applied to generate a hierarchy of latent factors. Patients are stratified relative to each factor and combinatoric survival analyses are performed and interpreted in the context of biological function annotations and protein network interactions that might be utilized to match patients to multiple therapies. Results Analysis of ovarian tumor RNA-seq samples demonstrates the algorithm's power to infer well over one hundred biologically interpretable gene cohorts, several times more than standard methods such as hierarchical clustering and k-means. The CorEx factor hierarchy is also informative, with related but distinct gene clusters grouped by upper nodes. Some latent factors correlate with patient survival, including one for a pathway connected with the epithelial-mesenchymal transition in breast cancer that is regulated by a potentially druggable microRNA. Further, combinations of factors lead to a synergistic survival advantage in some cases. Conclusions In contrast to studies that attempt to partition patients into a small number of subtypes (typically 4 or fewer) for treatment purposes, our approach utilizes subgroup information for combinatoric transcriptional phenotyping. Considering only the 66 gene expression groups that are both found to have significant Gene Ontology enrichment and are small enough to indicate specific drug targets implies a computational phenotype for ovarian cancer that allows for 366 possible patient profiles, enabling truly personalized treatment. The findings here demonstrate a new technique that sheds light on the complexity of gene expression dependencies in tumors and could eventually enable the use of patient RNA-seq profiles for selection of personalized and effective cancer treatments.