Apollo Warns AI-Driven Hyperscaler Debt Is Getting Riskier

According to CNBC, Apollo Global Management warned that corporate debt issued by major cloud computing companies powering the artificial intelligence boom is becoming riskier, as credit default swaps on bonds issued by hyperscalers have risen. Apollo chief economist Torsten Slok said the market is repricing hyperscaler credit fundamentals, citing a debt-financed AI capex cycle, rising leverage, negative free cash flow and uncertain payback on depreciating assets. He said the gap between hyperscaler CDS and bank CDS has widened to about 60 basis points from roughly zero since October 2025, suggesting the credit risk is increasing on its own terms. The note followed weekend warnings from leaders of frontier large language models that they want to slow the pace of product advances because of safety concerns, which could have financial consequences for cloud providers.