More From John Zito: "AI Is 'Hyper-Deflationary,' Making Risk Hard To Price, Says Apollo's Co-President"

Following on the post immediately below, "Apollo’s Zito Says Too Much AI Spending Is for ‘Low IQ’ Tasks" this time from Benzinga, June 10:

The latest inflation data offered fresh evidence that price pressures remain contained, even as investors continue to wrestle with concerns over interest rates, fiscal deficits and an increasingly fragmented geopolitical landscape.

Yet for some of Wall Street’s largest alternative asset managers, those macro debates are beginning to take a back seat.

Apollo Global Management co-President John Zito said the usual checklist of inflation, deficits, interest rates and political fragmentation matters far less than a single emerging force: artificial intelligence.

"I spend very little time thinking about most of the things you just brought up," Zito said, when asked about the macro environment during the Morgan Stanley Financial Services Conference on June 10.

"I think the only thing that matters is whether what's going on with Anthropic in the labs is real or not. It's so dwarfing with what's going on in the world."

How Will AI Transform Market Dynamics?
Traditional macro signals, such as the latest inflation reading and central bank policy trajectory, still shape financing conditions. But Zito argued they are increasingly secondary to technological disruption that is moving at a scale and speed that is difficult to price.

"If AI is real, it's so hyper deflationary to so many things over the long term that it's really hard to take risk," he said, adding that forecasting the next 12 to 24 months has become "as hard an environment to probability weight what the world looks like. It’s just a really difficult environment."

The implication is not just volatility, but uncertainty about the structure of future earnings itself....

....MUCH MORE 

Some smart people are using an 18-month timeframe* for the coming changes.

Fasten your seat belt. 
* Recently:

April 26 - U.S. Treasury Secretary Bessent On A.I.: "'a year, maybe 18 months,' before the new technology defines our lives across the board."

May 8 - AI: "Are we just 18 months away from everything changing?"

June 5 - Anthropic Warns Fully Recursive AI Is Coming Faster Than Expected, Humans May Lose Control