Apollo plans a more defensive playbook for AI lending

What Apollo said on the call

Apollo is pouring billions into the infrastructure behind AI, but it wants to dial back risk while doing it. On a Tuesday analyst call, President Jim Zelter said, "We know that society will use dramatically more computing power in the future," added that chip demand should stay robust, "and that AI capabilities are improving at an extraordinary rate." His caveat: "What we don't know is how pricing and economics will evolve."

Zelter said the more cautious posture will translate into greater focus on secured loans and other senior debt, along with strict caps on exposure to individual borrowers. He added that Apollo is prioritizing spots higher in the capital structure. His summary was direct: "The logical conclusion is to take risk off, position defensively and prepare for the opportunity to play offense."

According to CEO Marc Rowan, the firm is observing high valuations across markets along with elevated risk, informing the choice to remain defensive. As he put it, "FOMO is not an investment strategy" and "We are prudent and we are cautious, especially in credit."

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Athene's exposures and the AI buildout

In an Oct. 30 filing, Athene said that by Sept. 30 it held $12.9 billion in digital infrastructure investments. It detailed exposure by borrower and asset class and noted that most positions are secured and investment grade. Those figures do not count commitments for which Apollo has not yet funded the debt.

Among its larger AI exposures are $3.1 billion with SpaceX, $2.4 billion directed to Oracle Corp., $2.3 billion for Meta Platforms Inc., and $1.1 billion allocated to Anthropic PBC and Broadcom Inc. Those figures are partial because the Broadcom debt reflects only one of several tranches that Apollo has pledged to the chip firm under its leasing agreement with Anthropic.

Alternative-asset heavyweights such as Apollo and Blackstone Inc. are racing to finance AI buildouts.

The investor angle

In plain English, Apollo is aiming to keep concentration tight while lending nearer the front of the repayment line, even as it backs the physical backbone of AI.

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