Apollo Global Management President Jim Zelter Talks SpaceX IPO, Iran & More

Jim Zelter (Apollo) argues the massive, multi-year AI and related CapEx boom, combined with record IG and equity issuance, is creating a long-term crowding out effect on government debt yields. He sees rates staying higher for longer, but believes the US market's depth can absorb the supply. Apollo prefers structured, amortizing financings (e.g., chip infrastructure) to avoid residual equity risk. He is surprised geopolitical tensions (Iran) haven't caused more oil volatility, but sees the AI trend dominating for years. The ultimate impact on employment and inflation will take 18-24 months to materialize.

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AI CapEx (sharp up)

Apollo Global Management 9.0
Asset Manager $671.00B
Jim Zelter 9.5

Apollo Global Management President Jim Zelter Talks SpaceX IPO, Iran & More | Bloomberg Talks

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Zelter emphasizes the strength and depth of US capital markets as a unique advantage ('secret sauce'). He warns against taxing foreign investors because it would harm this cost-of-capital advantage. This implies a view that the US dollar will remain strong or stable as a result of this capital inflow and economic leadership.

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Zelter is bullish on the leading tech companies (Alphabet, Microsoft, Broadcom) and their ability to access capital and drive the CapEx cycle. He sees the AI boom as a dominant trend for years. He quotes David Solomon saying 'there's more greed driving the market than fear'. This implies a positive outlook for the Nasdaq, driven by the Mag 7.

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The scale that you need to achieve to be relevant is much, much higher than it ever was before. That impacts a lot of smaller enterprises that are 5 to 10 billion.

2 calls

-1

no reliable edge (random outcomes)

6/1/2026 7:36:19 PM	medium term up	20 days later	+2.47%	+2.47%

wti

I am candidly surprised and I've been consistent that if we were still talking about Iran at this point with the straits being closed and the impact on oil prices that we would see some second and third derivative volatility.

10 calls

+23

more right than wrong, with meaningful gains

6/4/2026 9:00:32 PM	short term cautious up	5 days later	-0.56%	-0.28%
3/27/2026 7:30:29 PM	long term cautious down	60 days later	-15.09%	+7.54%
3/27/2026 1:02:36 AM	short term up	7 days later	+9.26%	+9.26%
3/3/2026 6:19:39 PM	short term up	5 days later	+26.94%	+26.94%
1/8/2026 11:05:50 PM	short term cautious down	5 days later	+4.91%	-2.45%

Show all 5 wti results

yields

I've been consistent here coming here in January and February and April that rates were not going down in the short term. I do think you're seeing a potentially long-term crowding out of this massive long duration CapEx boom around the globe and the impact on government debt yields around the globe.

18 calls

no reliable edge (random outcomes)

6/1/2026 9:35:58 PM	medium term up	20 days later	+1.21%	+1.21%
6/1/2026 7:36:19 PM	medium term up	20 days later	+1.21%	+1.21%
6/1/2026 7:02:14 PM	medium term up	20 days later	+1.21%	+1.21%
5/5/2026 6:12:22 PM	short term cautious up	5 days later	+1.24%	+0.62%
4/3/2026 7:31:50 PM	medium term up	21 days later	+0.02%	+0.02%
3/27/2026 8:49:47 PM	medium term up	21 days later	-2.12%	-2.12%
3/27/2026 7:30:29 PM	medium term up	21 days later	-2.12%	-2.12%
3/6/2026 4:48:14 PM	short term sharp up	5 days later	+3.68%	+5.52%
12/23/2025 11:03:06 PM	long term up	61 days later	-2.59%	-2.59%
10/28/2025 5:15:14 PM	medium term cautious up	20 days later	+1.60%	+0.80%
10/13/2025 6:26:53 PM	medium term cautious up	20 days later	+2.09%	+1.04%
10/9/2025 2:13:08 AM	medium term sharp up	20 days later	+1.04%	+1.56%
8/29/2025 2:18:36 PM	short term sharp down	6 days later	-5.40%	+8.10%
8/15/2025 11:30:11 PM	medium term cautious down	21 days later	-6.80%	+3.40%

Show all 14 yields results

Speaker2

Introduces the topic: Apollo's Jim Zelter highlights a pressure point. If Alphabet can't self-fund AI CapEx, think about smaller players. June is a stress test for the IG market. Notes record $1T+ IG issuance this year and Alphabet's $85B capital raise. Asks if demand can meet supply.
Speaker3

The breadth of global markets is key. The IG market, private credit, and equity markets are all growing together (always 'and', not 'or'). Alphabet's massive mandatory convert won't be the last; other tech companies will follow. The scale needed to be relevant as a public company is much higher, impacting smaller enterprises ($5-10B). The AI CapEx boom is unprecedented, but defense and utilities will also need massive capital.
Speaker2

Asks about crowding out: is there space for everyone?
Speaker3

Yes, there is a real crowding out effect on longer-tenor government debt yields globally. This is a long-term dynamic from the massive CapEx boom. IG market net issuance will be higher than Treasury net issuance this year. Mag 7 CapEx will be larger than Defense Department spending. These companies must generate a return on capital to justify the spending.
Speaker2

Asks how Apollo protects itself against increasing risk as numbers get bigger.
Speaker3

Apollo focuses on funding the 'picks and shovels' (AI infrastructure like chips), not the equity. They structure financings that amortize risk over 3-7 years, often with investment-grade counterparties, to avoid residual equity risk. This comes at a lower rate but higher quality.
Speaker2

Presents a hypothetical deal: a firm raising ~$36B in debt financing for Anthropic to buy chips from Google/Broadcom. Asks how to structure senior and subordinated tranches using an IG balance sheet like Broadcom.
Speaker3

Explains the structure: different investors have different risk appetites (short vs. long duration, senior vs. subordinated). The US market's depth allows appealing to all these buyers, just like the equity market has value, growth, and GARP investors. A company can do a $15-20B mandatory convert and find buyers.
Speaker1

Asks where the money is coming from globally and if yields (coupons) need to climb considerably to compete for capital.
Speaker3

Rates in the US are normal (where they've been for 30-40 years). There is a massive global retirement challenge (UK, Canada, Australia) with long-duration liabilities needing long-duration assets. There is a shortage of long-duration paper. This natural demand matches the long-duration needs of the CapEx boom. US companies benefit from lower-cost capital, a key driver of economic growth.
Speaker2

Suggests this is the 'creative' and potentially 'more dangerous' stage of financing, implying circular or off-balance-sheet debt.
Speaker3

Acknowledges the risk: one must be aware of who is taking equity risk at a fixed rate of return. His 41 years of experience lead him to invest alongside the leading, winner-take-most companies with downside protection. Some companies entering this cycle will fail (destructive aspect of capitalism), but investors are getting paid for that risk with structure.
Speaker2

Introduces a geopolitical segment: Iran ceasefire tensions, Trump's private red line (direct attack on US troops), and the lack of market reaction.
Speaker1

Notes that for markets, the geopolitical situation hasn't mattered. Recalls a previous clip where Jim Zelter advised to 'take a walk' and ignore the noise.
Speaker3

Confirms the advice was correct. The strong earnings season shifted focus to CapEx. There is more greed than fear in the market. He is surprised that Iran tensions haven't caused more oil volatility, but momentum can change quickly. The bigger AI/CapEx trend will dominate for the next couple of years.
Speaker1

Asks about the labor market and the stage of the cycle: are we at the ROI stage, or are companies cutting operational expenses to fund AI?
Speaker3

We are in a period of marginal optimization around hiring, not a secular trend. The true secular impact of AI on employment and returns will only be clear in 18-24 months (by June 2028). Anyone claiming to have it nailed down now lacks humility. The key question then will be whether the CapEx cycle is inflationary or deflationary.

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