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Apollo’s president warns the AI spending boom may not pay off for investors

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Tech companies are pouring trillions into artificial intelligence, but investors shouldn’t assume the bets will pay off, Jim Zelter, president of Apollo Global Management, said.

“We’ve seen this many times in our last 30 years, whether it’s cell phones or other technology uses. There’s no doubt they’re going to have a massive utility,” Zelter said on Goldman Sachs’ “Exchanges” podcast published on Thursday.

“But is the economic owner going to harvest the right returns for that investment?” he asked.

The buildout is already reshaping the industry’s economics. Zelter estimated that US data centers alone could require $5 trillion to $6 trillion over the next five years.

“There’s a massive capex cycle going on that’s turning an asset-light business into asset-heavy,” he said.

And a key question, he added, is what returns shareholders will ultimately see.

“Just because companies need capital, doesn’t mean they’re all great investments,” Zelter said.

For Apollo, the surge in spending represents a financing opportunity — but one that requires discipline.

Zelter said investors shouldn’t treat equity-like risk as if it were safe, fixed-income exposure. He emphasized that higher-risk investments need to be compensated accordingly, while lenders should ensure they have strong downside protections.

Zelter’s caution comes as debate grows over whether the AI boom is veering into hype.

Other big-name investors have also raised concerns about investor exuberance in AI.

Howard Marks, the cofounder of Oaktree Capital Management, said in December that too many investors have a “lottery-ticket mentality” when it comes to AI.

In February, veteran trader and economist Steve Hanke told Business Insider that AI is “overhyped and potentially dangerous.”

A recent KPMG US survey found that three-quarters of large-company CEOs said generative AI may have been overhyped over the past year, even as many said its longer-term disruptive potential remains underappreciated.

But they’re still spending: Nearly 80% of the CEOs told KPMG they plan to allocate at least 5% of capital to AI this year.




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Trump warns of more US troop deaths after 3 American service members were killed in the Iran conflict

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Three American service members have been killed and five seriously wounded as part of combat operations against Iran, the US military said on Sunday.

It is the military’s first acknowledgement of any US losses since American forces began striking Iran alongside Israel on Saturday.

“Several others sustained minor shrapnel injuries and concussions — and are in the process of being returned to duty,” said US Central Command, which oversees Middle East operations.

CENTCOM did not specify how or where the service members were killed and wounded or whether the losses were sustained during offensive or defensive operations. It declined to offer additional information.

“The situation is fluid, so out of respect for the families, we will withhold additional information, including the identities of our fallen warriors, until 24 hours after next of kin have been notified,” CENTCOM said in a statement, adding that combat operations will continue.

President Donald Trump on Sunday vowed vengeance for the service members killed.

“As one nation, we grieve for the true American patriots who have made the ultimate sacrifice for our nation, even as we continue the righteous mission for which they gave their lives,” he said.

“And sadly, there will likely be more,” Trump added. “Before it ends. That’s the way it is.”

Trump had said on Saturday that the US could suffer losses as a result of the conflict with Iran.


A missile launches from a US warship during operations against Iran.

The US military did not say where or how the casualties occurred.

US Central Command



“The lives of courageous American heroes may be lost, and we may have casualties. That often happens in war,” Trump said in a video address to the nation. “But we’re doing this — not for now — we’re doing this for the future, and it is a noble mission.”

Dozens of people have been killed and wounded by Iranian strikes in Israel and the United Arab Emirates, and hundreds of people in Iran have been killed and wounded by US and Israeli strikes, according to local authorities.

The Israeli military said on Sunday that it has killed 40 senior Iranian commanders, as well as the country’s Supreme Leader Ayatollah Ali Khamenei.

A wide range of American forces — on land, in the air, and at sea — have participated in the airstrikes against Iran, targeting the Islamic Revolutionary Guard Corps’ (IRGC) command and control facilities, air defenses, missile and drone launch sites, and military airfields.

US forces have also been involved in air defense operations to shield American assets and allies across the Middle East from hundreds of Iran’s retaliatory missile and drone attacks.

Iran has fired missiles at US forces based in Qatar, Kuwait, Bahrain, and the UAE and has also targeted other Middle East countries, including Israel, Saudi Arabia, Oman, and Iraq.




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Elon Musk warns Tesla employees over future of German megafactory ahead of union election

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Tesla’s sales in Europe are plummeting — and now Elon Musk has a warning for employees at the company’s German megafactory ahead of crucial union elections.

In an interview with Giga Berlin senior director Andre Thierig posted on X on Thursday, Musk said Tesla would “ideally” expand its only European gigafactory and start production of its battery cells, Cybercab robotaxi, and Optimus robot at the site.

Asked if he had any advice for the team at Giga Berlin to work toward that vision, Musk said any expansion was contingent on Tesla being free from interference from “outside organizations.”

“Things certainly get harder if there are outside organizations who are pushing Tesla in the wrong direction,” said Musk.

“It’s difficult to say that then we would expand, if we had outside organizations who were making things very difficult. We’re not going to shut down the factory, but we wouldn’t expand it either,” said the Tesla CEO.

The billionaire’s comments come ahead of a crucial vote at Tesla’s German factory next week, with powerful German union IG Metall pushing to gain control of the site’s work council — an elected body of employees required by local laws that negotiates pay deals and working hours with management.

German publication Handelsblatt first reported Musk’s comments, which it said were screened for employees on Wednesday.

Tesla clashes with union

The run-up to the election has been marked by fierce disputes between the union and Tesla’s executives. Earlier this month, Tesla filed a criminal complaint against an IG Metall representative, accusing them of secretly recording an internal meeting.

IG Metall, which has frequently clashed with Tesla over working conditions at Giga Berlin over the past few years, denied the allegation and responded with its own complaint accusing Thierig of defamation. The union said Thursday that both sides had agreed on a truce ahead of the works council elections.

The debate over Giga Berlin’s future comes as Tesla’s sales in Europe have collapsed. The US automaker saw registrations of its EVs fall nearly 38% in the EU last year, as it was hit by backlash over Musk’s political interventions and backing of German far-right party AfD.

In January, Tesla’s European sales dropped to just 8,000 units, according to data from the European Automobile Manufacturers Association, less than half the number sold by Chinese rival BYD.

Musk also said in the interview that Tesla expects to receive approval to sell Full-Self-Driving driver assist technology in the Netherlands on March 20.




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Katherine Li, West Coast breaking news reporter at the Business Insider.

The author of a viral AI report warns that blue-collar jobs won’t be safe from an AI-driven recession

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The coauthor of an AI research paper is speaking out after his work triggered a global stock sell-off.

Citrini, a firm focused on thematic equity investing, alongside Alap Shah, CEO of Littlebird.ai, theorized a future where, instead of transforming the economy in a positive way, the AI boom erases white-collar jobs and severely reduces the spending power of those workers, and eventually stunts economic growth.

On Monday, Shah told “TBPN” podcast hosts John Coogan and Jordi Hays that despite how well it seems to be going for blue-collar jobs at the moment in terms of growth and the lack of mass layoffs, these jobs won’t be safe if white collar jobs go away because ultimately, there is only “one labor market.”

“Let’s say in our scenario, we talk about 5% of folks might get fired in a couple of years,” said Shah. “Those 5%, if there aren’t white collar jobs for them to relocate into, then they’re going to have to move into the gig economy and the blue collar labor force.”

“And so that puts pressure on the entire labor market, not just the white collar one,” Shah added.

Shah and Citrini published a report on Sunday, written from a futuristic point of view set in 2028, that predicts a negative domino scenario triggered by the AI boom. The research theorizes that AI will kick off a mass white-collar layoff too quickly, which will then deal a blow to the metro housing and mortgage market, and eventually lead to a global stock sell-off and a widespread recession in all sectors. In this scenario, the paper said, AI growth could also lose momentum due to a lack of funding.

“The system turned out to be one long daisy chain of correlated bets on white-collar productivity growth,” the paper theorizes. “The November 2027 crash only served to accelerate all of the negative feedback loops already in place.”

Shah elaborated on these concerns on “TBPN.” When asked what he thinks of the current growth in the health and education sectors, Shah said most of it could be spurred by government spending, which would go away if personal income declines.

“Those sectors continue to grow because government spending grows,” said Shah. “But again, gets very circular if government spending is coming primarily from taxes and primarily payroll taxes because the average worker pays a lot more in taxes per dollar than the average corporate does.”




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AI CEO warns AI’s disruption will be ‘much bigger’ than COVID: ‘The people I care about deserve to hear what is coming’

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It’s never a good sign when a CEO warns something more disruptive than COVID is heading our way.

In an essay titled “Something Big Is Happening,” Hyperwrite CEO Matt Shumer said AI can now do all of his technical work — and he thinks your job could be next.

“I’m writing this for the people in my life who don’t… my family, my friends, the people I care about who keep asking me ‘so what’s the deal with AI?’ and getting an answer that doesn’t do justice to what’s actually happening,” Shumer wrote in his nearly 5,000-word post published Tuesday on X.

As of Wednesday morning, Shumer’s post had 40 million views and 18,000 retweets.

Shumer said that the reason people in tech “are sounding the alarm” is that they have already experienced what’s coming for everyone else.

“We’re not making predictions,” he wrote. “We’re telling you what already occurred in our own jobs, and warning you that you’re next.”

Shumer said that many people outside tech wrote off AI years ago after a clunky experience with an early edition of ChatGPT.

“The models available today are unrecognizable from what existed even six months ago,” he wrote. “The debate about whether AI is ‘really getting better’ or ‘hitting a wall’ — which has been going on for over a year — is over.”

It’s not the time to panic, Shumer said. Instead, the best thing to do is to become deeply familiar with AI. “This might be the most important year of your career,” he wrote.

“I don’t say that to stress you out. I say it because right now, there is a brief window where most people at most companies are still ignoring this,” he wrote. “The person who walks into a meeting and says ‘I used AI to do this analysis in an hour instead of three days’ is going to be the most valuable person in the room.”

He’s far from alone in sounding the alarm. Despite disagreement from other tech leaders, Anthropic CEO Dario Amodei remains adamant that AI could wipe out up to half of white collar, entry-level jobs in the next one to five years.

xAI CEO Elon Musk and others have warned that if your job doesn’t involve physical labor, it’s likely to be replaced by AI much more quickly, a view that dovetails with a growing base of economic research.

Shumer’s essay struck a chord, especially with those in tech. Reddit cofounder Alexis Ohanian replied, “Great writeup. Strongly agree.”

“Great advice for how to get ahead in your job at any large company right now,” A16z general partner David Haber wrote.

While the response to the post has been overwhelmingly positive, some X users pointed out the limitations still present in many current AI products, like hallucinations and general inaccuracies.

What changed Shumer’s mind

Shumer said that this moment feels like February 2020, when in a short span of time, news of a spreading pandemic gave way to a worldwide upheaval unseen in modern times that continues to reverberate to this day.

The potential of what AI will change, he wrote, is “much bigger than Covid.”

For Shumer, this moment of realization came with the recent dueling releases of Anthropic’s Opus 4.6 and OpenAI’s GPT-5.3 Codex. Both models are primarily aimed at software engineering. OpenAI said in its release notes that GPT-5.3 Codex “is our first model that was instrumental in creating itself.”

“It wasn’t just executing my instructions,” Shumer wrote of his experience with OpenAI’s latest Codex model. “It was making intelligent decisions. It had something that felt, for the first time, like judgment. Like taste. The inexplicable sense of knowing what the right call is that people always said AI would never have.”

AI is now so intelligent, Shumer said, that he can tell the agent what he wants and “walk away from my computer for four hours, and come back to find the work done. Done well.”

In a post on LinkedIn Wednesday morning, Shumer addressed his viral X post.

“Every time someone asks me what’s going on with AI, I give them the safe answer,” he wrote on Wednesday. “Because the real one sounds insane. I’m done doing that.”




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