Apollo manages more than $900 billion and is using private credit to bankroll long-term AI and infrastructure projects, co-president John Zito said. About half of that sits on Apollo's balance sheet through Athene; the rest includes a private equity arm and roughly $800 billion of credit capital. Zito said Apollo has done multi-billion-dollar GPU financings, but keeps those loans at five years and in the senior tranche, and he warned that off-balance-sheet debt pressure could push AI labs like Anthropic and OpenAI to go public sooner than markets expect.

John Zito's message is simple. Private credit is where long-term infrastructure finance lives now. Apollo manages more than $900 billion. Roughly half of that sits on its own balance sheet through Athene, Zito said. The other half is third-party capital split between a private equity business of over $100 billion and a credit book worth roughly $800 billion.

That capital gives Apollo an unusual edge. It can offer long-duration loans. Those match 15- to 20-year projects. Banks and public bond markets often can't. Banks are tied to short-dated deposits. Public bond investors demand different structures. So companies building data centers, manufacturing plants, and other physical assets are turning to private markets.

From big corporate loans to GPU financing

Apollo's deal list shows the shift. The firm closed an $11 billion loan for Intel. It arranged a $4.5 billion facility for RWE and a $6.5 billion deal for EDF. Apollo also completed multi-billion-dollar financing for BP. Those are investment-grade, secured credits at the top of the capital structure, Zito said.

At the same time, Apollo has backed GPU financing for AI infrastructure. Zito pointed to multi-billion dollar transactions for Valor and xAI. But he's clear about limits. "We did a multi-billion dollar GPU financing for Valor and xAI, but we stay at five years, the equity holders are making assumptions on what GPUs are worth later," he said.

"Anyone who says they know what the value of GPUs are in year five, seven, or ten, it's hard to take that with any credible view."

Mastheads

He called the potential cycle around GPU demand volatile and with fat tails. So Apollo sits in the senior tranche and keeps loan terms short. Zito said layering heavy leverage onto that uncertainty is "kind of scary."

AI labs, software and what investors should watch

Zito stressed a broader shift in tech investing. From 2018 to 2022, software made up about 30% to 40% of private equity activity, he said in a recent interview. That period rewarded businesses with near-perfect retention and high growth. Investors paid premium multiples. Apollo has been underweight software for roughly 18 months as a deliberate stance.

He argued strong near-term revenue doesn't prove long-term durability. He used BlackBerry as an analogy. BlackBerry's revenue grew after the iPhone launched. The market shifted later. Zito warned the marginal cost of producing software is moving toward zero. That dynamic can squeeze margins and change valuation norms.

Given that backdrop, Apollo says structure matters more than ever. The firm prefers investment-grade, senior lending secured by hard collateral. It focuses on seniority, downside protection, and credits that back businesses with long secular tailwinds. "For credit investors, we believe structure, seniority and downside protection matter more than ever," Apollo wrote in a company note summarizing Zito's remarks.

Zito also made a pointed call about AI labs going public. He said questions about off-balance-sheet debt and the complexity of financing will likely accelerate IPO timing. "I think the pressure and questions about off-balance-sheet debt will push Anthropic and OpenAI public way earlier than anticipated," he said.

That view ties into Apollo's broader allocation work. Firms that once rushed to scale software investments are now parsing which businesses have real moats. Zito expects outcomes to diverge. Companies with proprietary data, clear differentiation, and adaptable management will fare better. Those that are more commoditized may face valuation pressure.

On markets and dealmaking, that means more large-scale, structured loans. It also means credit teams are being asked to underwrite new asset types. Apollo's recent deals show lenders are now writing sizable facilities for major companies and energy projects. They're also financing AI infrastructure, but with tighter terms.

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"Anyone who says they know what the value of GPUs are in year five, seven, or ten, it's hard to take that with any credible view," said John Zito, co-president at Apollo Global Management.

This article was created with AI assistance.