topstockalerts
Apollo Global Management warned Wednesday that corporate debt at major cloud computing companies is becoming riskier as they increase spending on AI infrastructure. Credit default swaps (CDS) on bonds issued by major hyperscalers have become more expensive, reflecting concerns over higher leverage, negative free cash flow and uncertain returns on depreciating AI assets.
Apollo chief economist Torsten Slok said the spread between hyperscaler and bank CDS has widened to about 60 basis points from virtually zero since October 2025. According to Apollo, the increase suggests that credit risk at cloud providers is rising independently rather than simply reflecting hedging activity around new bond issuance.
The warning comes after leaders of major large language models said they want to slow the pace of product development for safety reasons, potentially affecting cloud providers that host and power these systems.
$APO
2
