In a recent appearance on Bloomberg TV, Apollo Global Management President Jim Zelter shared insights into the evolving global financial landscape as the world moves toward 2026. He cautioned against overreliance on conventional economic projections due to heightened market instability in recent years. Despite concerns about elevated valuations in the tech sector and persistent inflationary pressures, Zelter pointed to the enduring strength of the U.S. economy, underpinned by strong government expenditure, a surge in capital investments, and sustained merger and acquisition activity.
Zelter noted that investor expectations for declining interest rates alongside rising corporate profits present a challenging paradox, suggesting that one side of this equation may be misjudging current conditions. He reiterated Apollo’s belief that deep-rooted structural trends—such as demographic shifts and long-term capital deployment—are likely to sustain economic momentum even as borrowing costs stabilize.
A major focus of his commentary was the enormous funding required to expand artificial intelligence infrastructure, particularly data centers. He projected that between $5 trillion and $7 trillion will be necessary over the next five to seven years. While some of this will come from hyperscalers’ internal cash flows or investment-grade debt markets, a significant financing shortfall remains—one that could reshape both private and public credit landscapes. This gap may lead established tech firms to increasingly access credit channels traditionally used by industrial corporations, altering the profile of investment-grade borrowers.
He contrasted today’s environment with past technology booms, noting that current data center clients include some of the most financially stable companies in history. This shift allows lenders to consider longer-term, higher-quality credit instruments than previously possible during earlier phases of digital expansion.
Although fears of a broad credit downturn persist among some investors, Zelter observed that default levels remain low. Instead, he anticipates selective distress arising from AI-driven disruptions to legacy business models, rather than broad cyclical recessions. This environment, he argues, creates favorable conditions for active credit investors who can identify resilient performers amid transformative change.
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Jim Zelter Discusses Credit Markets, AI Infrastructure and Economic Resilience on Bloomberg TV
In an interview on Bloomberg TV, Apollo President Jim Zelter reflects on the state of global markets heading into 2026, noting that economic forecasts must be viewed with caution given the volatility of recent years. Despite ongoing concerns about overvalued technology stocks and inflation pressures, he highlights the remarkable resilience of the U.S. economy, supported by fiscal spending, a robust CapEx cycle and an active M&A backdrop.
Zelter explains that market expectations for both lower rates and accelerating earnings are difficult to reconcile and suggests that one side of the market is likely mispricing the environment. He emphasizes Apollo’s view that structural forces – including demographic trends and capital investment – are likely to support continued economic strength even as rates normalize.
A central theme of the interview is the massive capital required to build out AI-related data center infrastructure. Zelter estimates $5-7 trillion will be needed over the next 5-7 years, with only a portion funded through hyperscalers’ free cash flow or traditional investment-grade markets. The remaining financing gap, he notes, will reshape both public and private credit markets, altering the composition of the investment-grade issuer universe as large technology incumbents increasingly tap these channels.
He also distinguishes today’s financing environment from prior decades, observing that data center counterparties now include some of the strongest balance sheets in corporate history—meaning lenders can consider longer-duration and higher-quality risk than in past technology buildouts.
While some investors fear an impending distressed cycle, Zelter explains that current default rates remain modest. Instead, he expects “secular distressed” opportunities driven by AI-related business model disruption rather than cyclical downturns. This, in his view, underscores why dispersion makes it an attractive moment for credit investors, who can differentiate winners and losers amid rapid structural change.