Apollo Sees Earlier Debt Opportunity in AI Startups Than in Prior Tech Generation

Apollo Global Management, the $1 trillion alternative-asset manager, is positioning itself to finance artificial-intelligence startups through debt far earlier than it financed software companies, capitalizing on the capital-intensive nature of AI infrastructure. The firm has begun equity investments in hardware-focused startups including chip designer SiFive, factory-automation company Hadrian, and data-labeling platform Mercor, with the explicit plan to follow those stakes with debt, asset-backed loans, and hybrid structures as these companies scale. Apollo's strategy reflects a fundamental shift in how AI companies raise capital: unlike software businesses that could scale with modest upfront spending, AI startups face extraordinary expenses for compute, chips, and data-center infrastructure that demand financing models closer to traditional capital-intensive industries.