Apollo, the asset manager, is taking equity stakes in AI startups to position itself for the multibillion-dollar financings the sector's hardware buildout will require.
The Information reported that the strategy pairs those stakes with lending, giving Apollo a way to originate future deal flow rather than simply funding it.
From lender to backer
Over the past year Apollo has moved from large-scale lender to active backer of AI infrastructure.
It is using equity positions and structured-credit ties to build pipelines into the hardware financings it expects to arrange as demand for graphics processing units (GPUs) and data-centre computing power grows.
The dual approach, taking stakes now to secure lending mandates later, aims to lock in origination before rivals do.
A shifting hardware landscape
The push comes as specialised startups rebuild networking systems and try to replace Nvidia's NVLink, the fast interconnect technology that links chips inside AI data centres.
That shift could reshape where future computing capacity sits, and with it where the financing flows.
Risk in the underwriting
Hardware security remains part of the calculation.
Recent research flagged that new devices can read into protected areas of encrypted memory, underlining the operational and underwriting hazards attached to the assets Apollo is financing.
