Apollo’s Zelter on AI Capex, ‘Higher for a While’ Rates

The unprecedented scale of the AI infrastructure build-out demands a diverse range of capital, prompting Apollo Global Management to prioritize debt financing over equity to maintain a margin of safety. By targeting resilient, low-obsolescence assets—such as sports franchises like the Yankees and aviation infrastructure—Apollo secures stable returns in a high-interest-rate environment. Jim Zelter, President of Apollo, emphasizes that the current "higher for longer" interest rate regime represents a structural shift rather than a temporary anomaly. Consequently, the firm focuses on high-quality credit opportunities that leverage the strength of the broader economy while avoiding the volatility of equity-heavy positions. With the AI ecosystem requiring massive capital infusions, Apollo positions itself as a key debt provider, capitalizing on the competitive advantage of scale while navigating the risks inherent in a capital-intensive, winner-take-most market.