Apollo Secures Massive $3.4 Billion Loan to Power xAI’s Nvidia Chip Ambitions
Wall Street's capital is betting big on silicon supremacy.
Apollo Global Management is finalizing a staggering $3.4 billion loan package. The target? To fund a massive acquisition of Nvidia's cutting-edge chips for Elon Musk's xAI. This isn't just a purchase—it's an arms race for computational power, fueled by private credit instead of venture capital.
The Hardware Gambit
Forget software updates. The real bottleneck in the AI revolution is hardware. Securing enough high-performance GPUs has become a strategic imperative, a fact not lost on xAI's leadership. This deal signals a pivot: when you can't out-innovate the competition on algorithms alone, you try to out-muscle them on infrastructure.
The loan structure itself is a masterclass in financial engineering—leveraging future compute capacity to pay for today's silicon. It's a bold move that treats AI training clusters as collateral, a concept that would give a traditional banker heart palpitations.
Follow the Money
Where does this leave crypto? Watching from the sidelines, for now. While decentralized networks tout their computational futures, the centralized giants are writing multi-billion-dollar checks to lock down the physical means of production. It's a stark reminder that in the near term, AI might be built on blockchain-inspired ideas, but it's running on Wall Street-funded hardware.
The cynical take? Another case of private equity doing what it does best: providing the rocket fuel for a tech moonshot, complete with hefty interest payments and covenants buried in the fine print. The real 'intelligence' here might just be in the loan terms.
One thing's clear: the race for AI dominance is being fought with balance sheets as much as brainpower. And the bill for a seat at the table just hit $3.4 billion.
Apollo reports record capital inflows and growing fees
Meanwhile, Apollo’s Q4 2025 earnings were released today too, and the company beat the Street’s forecasts, pulling in nearly $30 billion in net inflows, boosting its total assets under management to $938 billion, a new record.
It wasn’t just inflows. Apollo said it also had a record quarter for deploying capital, which helped increase the fees it charges clients.
According to analysts surveyed by Visible Alpha, fee-related earnings ROSE 25% year-over-year to $690 million, thanks to a 27% spike in management fees and a 41% jump in fees from originating and syndicating deals through its capital markets division.
“Apollo’s fourth-quarter results capped a year of exceptional execution,” said CEO Marc Rowan in a statement. He added that the firm was pushing forward across multiple fronts: financing infrastructure, scaling retirement solutions, and giving more buyers access to private markets.
However, not all numbers were pretty. Net income fell 55% to $660 million, or $1.07 per share, which missed forecasts. Despite that, Apollo’s board approved a $4 billion share buyback, showing confidence in the long-term picture.
AI fears hit private credit as investors dump asset managers
As Apollo doubled down on leasing chips to xAI, the rest of the private credit market wasn’t having such a great week. Shares of big asset managers took a hit, with Ares Management falling over 12%, Blue Owl Capital down 8%, and KKR losing nearly 10%.
TPG fell 7%, while Apollo and BlackRock slipped over 1% and 5%, respectively. The S&P 500 barely budged, down just 0.1%, while the Nasdaq dropped 1.8%.
Why the selloff? Investors are starting to panic about how AI could change the game for borrowers. As software companies get disrupted, cash Flow gets tighter, and the risk of default climbs, especially when those buyouts are backed by murky, illiquid loans.
Mark Zandi, chief economist at Moody Analytics, said it’s tough to know the full risk because of how secretive the sector is. Still, he warned that the mix of fast-growing AI-related borrowing, more leverage, and low transparency were flashing big “yellow flags.” His words:
“There will surely be significant credit problems, and while the private credit industry is probably currently able to absorb any losses reasonably well, this may not be the case a year from now if the current credit growth continues.”
Meanwhile, Apollo’s Athene insurance unit brought in $34 billion in annuity inflows over 2025, with $7.3 billion coming in Q4. That’s down slightly from $36 billion in 2024. So retail demand might be cooling off just as risk levels are rising.
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