00:00It's Benzinga bringing Wall Street to Main Street
00:02Apollo Global Management warned Wednesday that corporate debt issued by major cloud
00:06computing companies powering the AI boom is becoming riskier as borrowing rises to fund
00:10AI spending. Chief Economist Torsten Schlock said credit default swaps on hyperscaler bonds
00:15are getting more expensive as markets reprice credit fundamentals, including rising leverage,
00:21negative free cash flow, and uncertain returns on depreciating assets.
00:24The gap between hyperscaler and bank CDS has widened to about 60 basis points from roughly
00:30zero in October 2025. Alphabet, Amazon, and Meta are projected to generate negative free cash flow,
00:37while Microsoft is expected to remain positive. Some technology investors argue improving hyperscaler
00:43margins could ease concerns as new capacity comes online in 2027 and 2028. For all things money,
00:49visit Benzinga.com.
Comments