Apollo Global Management has issued a stark warning that a deceleration in the artificial intelligence investment cycle could precipitate a US recession.
The asset manager argues that the current economic expansion is heavily leveraged on AI capex, and a failure to realize near-term returns poses a systemic threat to growth.
The BIS warned that excessive leverage in the AI infrastructure build-out could amplify financial instability if the expected productivity dividends fail to materialize.
The assessment aligns with growing skepticism among institutional investors regarding the sustainability of the AI boom.
Apollo’s commentary suggests that the market’s reliance on continued technological productivity gains leaves the economy vulnerable to a sharp correction if adoption rates or monetization timelines disappoint.
This view reinforces recent caution from the Bank for International Settlements, which has highlighted the dangers of debt-financed spending in the technology sector.
The BIS warned that excessive leverage in the AI infrastructure build-out could amplify financial instability if the expected productivity dividends fail to materialize.