Apollo plans to spend US$75 billion on AI chips, a scale far exceeding that of any Neocloud.

Private equity giant Apollo Global Management is betting on the AI chip market at an unprecedented scale, with its two pending chip deals totaling US$75 billionfar exceeding the US$27 billion in cumulative chip financing raised by the largest neocloud, CoreWeave, since 2023, and more than 10 times the scale of its second-ranked competitor. According to the latest report by The Information, SpaceX announced it will lease US$40 billion worth of Nvidia Vera Rubin chips, and Apollo will purchase these chips through its subsidiary and then lease them to SpaceX. Previously, in June this year, Apollo announced it had arranged US$35 billion in financing, together with Broadcom and Blackstone, for a transaction to purchase Google tensor processing units (TPUs) and lease them to Anthropic. Once the above transactions are completed, Apollo will rank second only to hyperscale cloud service providers such as Amazon, Microsoft, and Google in terms of AI chip holdings, becoming the non-hyperscale player with the world's largest chip reserves and completely changing the competitive landscape of AI infrastructure. Apollo earns fees in these transactions by arranging deals and managing financing funds. Two mega-deals establish chip dominance Apollo's current chip footprint consists of two core transactions. The first is the US$35 billion transaction announced in June this year: Apollo, together with Broadcom and Blackstone, purchased Google TPUs and leased them to AI startup Anthropic. The second is the US$40 billion transaction that surfaced last week with SpaceX's announcement: Apollo, through a subsidiary, purchased Nvidia Vera Rubin chips and then leased them to Musk's SpaceX. The two transactions total US$75 billion, making Apollo's scale in chip financing far larger than any single neocloud. According to data compiled by The Information, CoreWeave has raised a cumulative US$27 billion through chip-collateralized financing since 2023, ranking first among neoclouds; it is followed by Valor (US$5.4 billion), Nscale (US$4.9 billion), IREN (US$3.9 billion), Lambda (US$1.5 billion), Crusoe (US$1.1 billion), Nebius (US$775 million), and Sharon AI (US$356 million). It is worth noting that the above statistics only cover financing collateralized by GPUs and TPUs, and do not include convertible bonds and credit facilities issued by various neoclouds to finance operations. In addition, another US$63 billion transaction arranged last week by Citigroup, Bank of America, and Blackstoneused to provide financing for Anthropic's procurement of Broadcom chipswas also not included in the above comparison because the parties did not disclose the actual holder of these chips. Chip financing model: scaled replication of the SPV structure The chip financing structure adopted by Apollo is derived from the special purpose vehicle (SPV) model jointly pioneered by CoreWeave and Blackstone in 2023. Under this arrangement, the neocloud and its financial partners jointly establish an SPV, which issues debt to purchase chips, and the rent paid by end users of the chips is used to repay the debt. Apollo's operating logic is in the same vein, but on a larger scale. Unlike many neoclouds, Apollo has not invested additional capital to build data centers for storing chips; its business model is more focusedby purchasing chips and leasing them to end users, it earns deal arrangement fees and fund management fees. Hyperscale cloud service providers do not need to use the SPV structure and can directly complete chip procurement through free cash flow, equity issuance, or traditional corporate bonds, which is also the essential difference between Apollo and hyperscale cloud service providers. Insurance capital drives Apollo's transformation Apollo's chip bet reflects the profound transformation of this veteran private equity institution over the past decade. Apollo was co-founded by billionaire Leon Black and has been in existence for more than 36 years. It was known in its early years for leveraged buyouts, including the nearly US$30 billion acquisition of casino giant Harrah's Entertainment in 2008. Over the past decade, Apollo has absorbed capital from insurance companies on a large scale. Insurance funds prefer asset classes with yields higher than investment-grade bonds but credit ratings that remain investment grade, and chip financing transactions fit this need precisely. This shift in capital structure has provided Apollo with ample ammunition for large-scale deployment in the AI infrastructure sector. Chip financing is a completely new business direction for Apollo, but the logic behind it is exactly the same as traditional private credit: use assets as collateral, provide structured financing, and earn stable spread income. As demand for AI computing power continues to expand, Apollo is pushing this logic to a new order of magnitude. This article is reprinted from the "Wallstreetcn" APP, author: Zhao Ying; GMTEight editor: Song Zhiying.