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(Bloomberg) -- SK Hynix Inc. (SKHY) plans to return about 80% of the gains from selling down its stake in ***** an's Kioxia Holdings Corp. to shareholders through a special dividend of about 16 trillion won ($12 billion), the DongA Ilbo newspaper reported.
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Most Read from Bloomberg
Trump Prepares for Iran Escalation After US, Israeli Polls
Apollo's Slok Says AI Has Delivered Zero Payoff Outside of Tech
Bitcoin Billionaires Are Racing to Ride a 3,000% Crypto Boom
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2 months ago
Apollo Global Management warned Wednesday that credit default swaps on hyperscaler debt are pricing in more risk. Chief economist Torsten Slok tied the shift to weakening credit fundamentals rather than routine bond-dealer hedging.
Hyperscalers are the cloud computing giants, including Amazon, Microsoft, Google, and Meta, that run the infrastructure behind the AI boom. They face a credit default swap (CDS) gap against bank debt, widened to about 60 basis points since October 2025.
Slok made the case in a Wednesday note reported by CNBC.
"What the market is repricing is hyperscaler credit fundamentals, namely a debt-financed AI capex cycle with rising leverage, negative free cash flow and uncertain payback on depreciating ****** ets."
Dan Alpert, founding managing partner of Westwood Capital, compared the setup to the run-up to the 2008 mortgage crisis. He said banks have since built far bigger equity buffers and are more diversified than they were then.
#slok
Hyperscalers are the cloud computing giants, including Amazon, Microsoft, Google, and Meta, that run the infrastructure behind the AI boom. They face a credit default swap (CDS) gap against bank debt, widened to about 60 basis points since October 2025.
Slok made the case in a Wednesday note reported by CNBC.
"What the market is repricing is hyperscaler credit fundamentals, namely a debt-financed AI capex cycle with rising leverage, negative free cash flow and uncertain payback on depreciating ****** ets."
Dan Alpert, founding managing partner of Westwood Capital, compared the setup to the run-up to the 2008 mortgage crisis. He said banks have since built far bigger equity buffers and are more diversified than they were then.
#slok
3 months ago
"Is there an AI bubble?" is such a tired thought. Here's something altogether more wired: The AI boom is paying off, but not in a way that the current equities market has accounted for. The success of the technology in one area of the economy could make the bubble real in another, more precisely.
In a blog post published on Friday, Apollo Chief Economist Torsten Slok highlighted that the parts of the AI value chain with the highest profit margins—companies making AI models and applications—actually have the lowest levels of profitability, a departure from the standard business model of, well business, in which profit margins are higher for companies selling an end product to consumers.
Slok broke down AI companies into four categories: models and applications, cloud and compute, energy and grid, and silicon and equipment. Using data from Pitchbook and Bloomberg for companies including OpenAI, Anthropic, Microsoft, Amazon, Constellation Energy, Nvidia, AMD, and Micron, Slok calculated that silicon and equipment—such as chipmakers—has the highest profit margin, 41%, in the AI value chain. Meanwhile, models and applications—like Anthropic—have a -59% operating margin.
Slok warns that this sharp disparity is because money from the AI boom is not coming from natural demand for AI applications, but rather shareholders hoping to cash in on what they hope is the next technological revolution.
"AI boom's profits are currently being funded by investors rather than earned from customers," Slok said. "The upstream margins are real, but they are paid for out of capital raised by the layer losing money, not out of cash generated by end demand."
#profit #boom
In a blog post published on Friday, Apollo Chief Economist Torsten Slok highlighted that the parts of the AI value chain with the highest profit margins—companies making AI models and applications—actually have the lowest levels of profitability, a departure from the standard business model of, well business, in which profit margins are higher for companies selling an end product to consumers.
Slok broke down AI companies into four categories: models and applications, cloud and compute, energy and grid, and silicon and equipment. Using data from Pitchbook and Bloomberg for companies including OpenAI, Anthropic, Microsoft, Amazon, Constellation Energy, Nvidia, AMD, and Micron, Slok calculated that silicon and equipment—such as chipmakers—has the highest profit margin, 41%, in the AI value chain. Meanwhile, models and applications—like Anthropic—have a -59% operating margin.
Slok warns that this sharp disparity is because money from the AI boom is not coming from natural demand for AI applications, but rather shareholders hoping to cash in on what they hope is the next technological revolution.
"AI boom's profits are currently being funded by investors rather than earned from customers," Slok said. "The upstream margins are real, but they are paid for out of capital raised by the layer losing money, not out of cash generated by end demand."
#profit #boom
