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Author: Rob Bittencourt, Partner & Head of Apollo Thematic Investing
The Core Thesis: HALO is the New Paradigm
Apollo argues that the investment zeitgeist has fundamentally shifted away from capital-light, high-margin software businesses toward what they term HALO — Hard Assets, Low Obsolescence. Factories, fiber, and railroads are back in vogue, driven largely by AI-induced obsolescence fears in the…
"Investors aren't blindly buying a vision anymore; they are policing the cash conversion path." - Tony Pasquariello (On the shift in market sentiment toward Big Tech spending) [00:04:15]
"Strategic necessity isn't a blank cheque; the market is starting to demand a 'show me' phase for AI revenues." - Dominic Wilson (Discussing hyperscaler capital…
Putting the total amount of hyperscaler capex into perspective | Feb 2026 | Apollo Global Management
Apollo: The amount of money being spent on capex by hyperscalers is enormous at around $646 billion in 2026.
The charts in this chart book put that number into perspective.
Specifically:
Big tech and AI labs build on-site power generation amid grid constraints #cbinsights
Source: Haydn Belfield
Combined 2026 CapEx for the Big 4 (Alphabet, Amazon, Microsoft, Meta) is projected to be $590 billion.
Equivalent to ~65-70% of the US military budget ($850–$900bn)
2. ~1.9% of US GDP Rivals peak spending of the Interstate Highway System (~1.8% GDP in the late 1950s)
Zerohedge: Once MSFT goes FCF < 0, the off-balance sheet tsunami will make Enron look like amateur hour | Source : Peter Berezin BCA