Freedom Explains How Apollo is Tackling the Risk of an “AI Bubble”

U.S. investment firm Apollo Global Management (APO) has implemented a new risk assessment framework for investments in artificial intelligence (AI)-related companies. According to Freedom analyst Natalia Milchakova, this approach could become a benchmark for the broader financial market amid surging investor interest in the AI sector.

Apollo Global Management is one of the world’s largest investment firms, managing hundreds of billions of dollars in assets. The new risk management methodology focuses on a deep assessment of risks associated with companies developing AI technologies and software.

Freedom believes that adopting such tools can help financial institutions avoid excessive concentration in specific market segments and reduce the probability of material losses.

The new system is particularly relevant for investors actively allocating capital to software developers and businesses built around AI technologies. According to the analyst, a more conservative risk assessment approach will help identify overvalued assets early and mitigate bubble formation.

Freedom analysts note that the rapid rise in AI company valuations is increasingly drawing comparisons to the dot-com bubble of the early 2000s. Therefore, the introduction of additional risk controls could have a significant market impact.

If other major investment funds adopt similar methodologies, it could reshape how AI-related companies are valued across global capital markets, the expert adds.

Not an individual investment recommendation.