AI is no longer just an equity story, Apollo warns it’s a bond one

Apollo chief economist Torsten Slok says AI is now driving nearly half of all investment‑grade issuance and most VC funding, turning the AI boom into a full credit market cycle.

Artificial intelligence has moved well beyond the stock market. According to Apollo chief economist Torsten Slok, AI now accounts for nearly half of all investment-grade bond issuance, 87% of venture capital funding, and a growing share of the high-yield market — a data point that reframes the AI trade as a credit market story as much as an equity one.

Slok published the findings on May 18 in his Daily Spark column, writing that “what began as an equity market phenomenon has become a capital markets-wide transformation.” The chart accompanying the note, sourced from Goldman Sachs, JP Morgan, Bloomberg, Crunchbase, and Apollo analysts, shows AI representing 49% of year-to-date net investment-grade issuance, 87% of VC funding, and 38% of high-yield net issuance.

The numbers reflect the sheer scale of debt being issued by hyperscalers and AI-adjacent companies to fund data center buildouts. As crypto.news reported, Apollo’s chief economist has repeatedly flagged AI infrastructure spending as one of the dominant forces shaping capital market dynamics entering 2026.

Credit markets absorb the AI buildout

The concentration of AI issuance in investment-grade credit tracks the spending commitments of the five largest hyperscalers. Apollo Global president Jim Zelter said at the Milken Institute conference earlier this month that this year’s net origination of investment-grade debt is projected to surpass $1 trillion, outpacing net issuance relative to the U.S. Treasury market. The top five hyperscalers — Amazon, Google, Meta, Microsoft, and Oracle — are projected to invest $751 billion in capital expenditures in 2026, an 83% increase over 2025, according to Goldman Sachs strategists. Zelter said it will take “all markets, including equity, operational cash flows, and both public and private investment-grade markets” to realize those figures.

Venture capital has proven even more concentrated. The 87% AI share of VC funding reflects a dynamic that has been building for months, as generalist funds and specialist investors alike reallocate away from non-AI software toward foundation models, inference infrastructure, and AI-native enterprise tools. Anthropic alone is currently pursuing a $50 billion raise targeting a $900 billion valuation, while OpenAI closed a $122 billion round in March at an $852 billion post-money valuation.

High yield begins to reflect AI risk

The 38% AI share in high-yield markets signals that the financing wave is expanding beyond investment-grade issuers into riskier corners of credit. That shift carries implications for portfolio construction. As crypto.news covered, Arthur Hayes has argued that AI’s penetration of the credit stack creates systemic exposure if the buildout cycle stalls, projecting that AI-driven job displacement among knowledge workers could trigger over $500 billion in consumer and mortgage defaults with knock-on effects for bank equity. Apollo itself, which manages over $700 billion in assets and has been deepening its position in on-chain credit markets through partnerships including a deal to acquire up to 90 million MORPHO tokens, sits at the intersection of both the traditional and decentralized credit systems now absorbing AI-related capital flows. Slok’s note is a concise expression of a structural reality: the AI investment cycle is no longer a story told in price-to-earnings multiples. It is now embedded in the plumbing of global credit.