Jim Zelter’s warning hit hard because he was not talking about a normal slowdown. He was describing the kind of break that wipes out entire business models and leaves companies with no way back. He spoke calmly, but the message underneath was anything but calm.
“I think you’re going to get more secular distress than cyclical distress. That’s very important. When we think about secular distress, I think the development of AI will change broad business models. We’ve talked a lot about healthcare technology…. about the outsourcing businesses… about software, enterprise software. The AI impact can have dramatic impact on those business models.
And typically, when you go back in the underwriting memo, you think about your base case and the downside being down 5, 10, 15%. When you have secular dislocation, you’ve missed the downside by multiples. And that’s what you’re probably going to have”
Big warning from Apollo Pres Jim Zelter "going to get more secular distress than cyclical distress".
"I think you're going to get more secular distress than cyclical distress. That's very important. When we think about secular distress, I think the development of AI will change… pic.twitter.com/ufVLDdJ8Jy
— Dan Tsubouchi (@Energy_Tidbits) December 2, 2025
Zelter is telling everyone that the old safety assumptions are worthless now. The downside is not a dip. It is a plunge. It is what happens when the work that once supported entire industries gets replaced overnight by something faster and cheaper.
Jared Kaplan from Anthropic described a danger far bigger than lost revenue. He described a moment when machines begin training themselves, and humanity has to decide if it lets that happen.
“Humanity will have to decide by 2030 whether to take the ultimate risk of letting artificial intelligence systems train themselves to become more powerful. Jared Kaplan said a choice was looming about how much autonomy the systems should be given to evolve. The move could trigger a beneficial intelligence explosion or be the moment humans end up losing control. He urged international governments and society to engage in what he called the biggest decision.”
Put these two warnings together and the picture becomes impossible to ignore. Zelter is saying the economic floor is breaking. Kaplan is saying the control ceiling might blow open next.
Whole systems are starting to crack. People inside the machine know it. Everyone else still acts like this is just another tech story.