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Apollo Global Managements Co-President John Zito Declares AI the New Macro Driver
At the Morgan Stanley Financial Services Conference on June 10, Apollo Global Management co‑president John Zito told attendees that the traditional macro‑economic indicators—inflation, fiscal deficits, interest rates and geopolitical fragmentation—are becoming less relevant for the firm’s investment decisions. He said the single factor that matters most is the progress being made by Anthropic, the San Francisco‑based AI startup, and the broader AI ecosystem.
Zito explained that the pace and scale of AI development make it a deflationary force that is difficult to price. "If AI is real, it’s so hyper‑deflationary to so many things over the long term that it’s really hard to take risk," he said. "Forecasting the next 12 to 24 months has become as hard an environment to probability weight what the world looks like. It’s just a really difficult environment." He added that the uncertainty is not only about market volatility but also about the very structure of future earnings.
The comments reflect a view that AI could reshape entire industries. Zito noted that frontier AI companies such as Anthropic are growing revenue at a pace that could move a firm from tens of billions of dollars in annualized revenue to hundreds of billions in a few years. "I think some businesses are going to massively thrive, but most of the efficiencies will be driven toward the big‑scale players," he said. He warned that smaller software firms may face tighter margins as competition intensifies.
Apollo’s asset allocation strategy is already shifting to accommodate this new reality. The firm has increased exposure to U.S. Treasury securities and hard assets, and it has tilted toward inflation‑protective positions. At the same time, Apollo has participated in large‑scale, infrastructure‑adjacent financing deals, including high‑profile allocations tied to companies such as Broadcom and SpaceX, as well as in the sports sector. These moves are part of a broader push into durable, systemically important assets.
"The goal is to build portfolios that can withstand a range of outcomes, particularly if artificial intelligence proves to be a powerful deflationary force over time," Zito said. He emphasized that diversification is essential: "If you’re not diversified, there’s not much you can do."
Apollo’s approach reflects a broader trend among alternative‑asset managers to hedge against the disruptive potential of AI while still pursuing growth opportunities. The firm’s current focus on credit, private equity, and real assets—where it manages roughly $840 billion in assets as of 2025—provides a platform for deploying capital into both traditional and technology‑driven sectors.
In the coming months, Apollo is expected to continue expanding its infrastructure financing portfolio and to evaluate additional opportunities in AI‑related businesses. The firm’s strategy will likely evolve as the pace of AI development accelerates and as macro‑economic conditions shift. For now, Apollo’s leadership signals that the AI revolution is the dominant factor shaping investment decisions, eclipsing conventional macro signals.
Zito explained that the pace and scale of AI development make it a deflationary force that is difficult to price. "If AI is real, it’s so hyper‑deflationary to so many things over the long term that it’s really hard to take risk," he said. "Forecasting the next 12 to 24 months has become as hard an environment to probability weight what the world looks like. It’s just a really difficult environment." He added that the uncertainty is not only about market volatility but also about the very structure of future earnings.
The comments reflect a view that AI could reshape entire industries. Zito noted that frontier AI companies such as Anthropic are growing revenue at a pace that could move a firm from tens of billions of dollars in annualized revenue to hundreds of billions in a few years. "I think some businesses are going to massively thrive, but most of the efficiencies will be driven toward the big‑scale players," he said. He warned that smaller software firms may face tighter margins as competition intensifies.
Apollo’s asset allocation strategy is already shifting to accommodate this new reality. The firm has increased exposure to U.S. Treasury securities and hard assets, and it has tilted toward inflation‑protective positions. At the same time, Apollo has participated in large‑scale, infrastructure‑adjacent financing deals, including high‑profile allocations tied to companies such as Broadcom and SpaceX, as well as in the sports sector. These moves are part of a broader push into durable, systemically important assets.
"The goal is to build portfolios that can withstand a range of outcomes, particularly if artificial intelligence proves to be a powerful deflationary force over time," Zito said. He emphasized that diversification is essential: "If you’re not diversified, there’s not much you can do."
Apollo’s approach reflects a broader trend among alternative‑asset managers to hedge against the disruptive potential of AI while still pursuing growth opportunities. The firm’s current focus on credit, private equity, and real assets—where it manages roughly $840 billion in assets as of 2025—provides a platform for deploying capital into both traditional and technology‑driven sectors.
In the coming months, Apollo is expected to continue expanding its infrastructure financing portfolio and to evaluate additional opportunities in AI‑related businesses. The firm’s strategy will likely evolve as the pace of AI development accelerates and as macro‑economic conditions shift. For now, Apollo’s leadership signals that the AI revolution is the dominant factor shaping investment decisions, eclipsing conventional macro signals.
