Apollo Global Management has become more selective on new investments as geopolitical risk rises and artificial intelligence spending reshapes capital markets, according to president Jim Zelter.

Speaking on Bloomberg TV, Zelter said the firm has raised its internal hurdle rate over the past year, despite solid US economic growth and a massive capital expenditure cycle driven by AI and data centre investment.

Zelter warned of a $1tn to $1.5tn gap between hyperscalers’ projected capital spending over the next five to six years and the amount expected to be raised from equity and public debt markets. He said this shortfall is likely to place increasing strain on the investment-grade bond market, with hyperscalers potentially accounting for 10% to 15% of issuers.

At the same time, Zelter said the US financial system remains resilient, citing healthy banks and an active securitisation market, which he argued makes a deep recession less likely.

Apollo has positioned itself to benefit from the build-out of AI infrastructure, including its agreement last year to acquire a majority stake in Stream Data Centers, as it balances higher risk thresholds with targeted exposure to long-term structural growth themes.

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