Alphabet vs YouTube

Apollo Warns Hyperscaler Debt Risk Rising

In a Wednesday note, Apollo Global Management's chief economist Torsten Slok warned that credit default swaps (CDS) tied to hyperscaler bonds are signaling increasing credit risk, with the spread between hyperscaler and bank CDS widening to around 60 basis points from near zero since October 2025. Slok attributes this to a debt-financed AI capex cycle with rising leverage, negative free cash flow, and uncertain payback on depreciating assets. The warning follows calls from frontier model leaders to slow AI advancement due to safety concerns, which could impact cloud providers. While some technology investors like Paul Meeks of Freedom Capital Markets see improving margins, economists like Dean Baker of CEPR note that sophisticated CDS investors are attaching greater risk to the debt of the most profitable companies, suggesting substantial risk in AI investments.

• Apollo Global Management warned that hyperscaler credit default swaps are rising, indicating increasing credit risk.
• The gap between hyperscaler CDS and bank CDS widened to ~60 basis points from ~0 since October 2025.
• Apollo's chief economist Torsten Slok attributes the repricing to debt-financed AI capex with rising leverage and negative free cash flow.

Santoli: AI's Youthful Phase Over, Investors Face New Reality

CNBC's Mike Santoli argues that the 'youthful phase' of AI investing, characterized by unlimited promise and easy winners, is over. Semiconductor stocks have fallen 20% from June highs, and the S&P 500 tech sector's forward P/E has contracted from 29 to 21. The narrative has shifted from opportunity to risk, with public sentiment turning against AI and concerns about data center overbuilding. However, the purge of speculative excess may reset sentiment and prevent a 1999-style bubble. The article draws parallels to the late-1990s tech boom, noting Fed rate hikes and rising Treasury yields. A potential silver lining is that a slowdown could allow major AI capex spenders like Microsoft, Alphabet, and Meta to consolidate before further investment. The market is rewarding companies with strong free cash flow, as seen in the VictoryShares Free Cash Flow ETF's outperformance.

• Semiconductor shares are 20% off their June highs as of the article's date.
• The S&P 500 tech sector's forward P/E has contracted from 29 to 21 over the past year.
• The Federal Reserve is poised to begin lifting interest rates.

Tesla Cybercabs in New York Have Steering Wheel, Person

Tesla's Cybercabs have been spotted in New York City with steering wheels and safety drivers, despite the company's plan for fully autonomous, steering-wheel-free robotaxis. The local news outlet Gothamist reported the sightings, and New York's transportation authorities acknowledged Tesla is testing a 'supervised' autonomous driving system. Fully driverless robotaxi services are not permitted in New York, and commercial autonomous taxi operations are currently banned. Tesla has not commented on the matter, and reports suggest the company may be using the New York deployment to collect data. This follows Waymo's own challenges in the city, where its testing permit expired and a limited robotaxi service approval was revoked in early 2026.

• Tesla Cybercabs with steering wheels and safety drivers have been sighted in New York City.
• New York's transport authority confirmed Tesla is testing a 'supervised' autonomous system.
• Fully driverless robotaxi services and commercial autonomous taxi operations are not allowed in New York City.

Creators on Capitol Hill: Launching the Senate Creators Caucus

YouTube announces the launch of the Senate Creators Caucus, bringing creators to Washington, D.C. to engage with policymakers.

IAB Targets Creator Spend Standardization as UK Hits £1bn, US Nears $44bn

At its inaugural Creator Fronts during Global Creator Week, the IAB highlighted the rapid growth of creator marketing, with UK advertiser spend projected to exceed £1bn in 2026 and US spend nearing $44bn. IAB executives emphasized the need for standardized metrics, particularly a common definition of 'view', to reduce friction and unlock further investment. The organization announced its Trusted Creator Brand Deal Initiative to establish common definitions and rules. Presentations from platforms like Meta, YouTube, and Twitch showcased their creator monetization tools, while Unilever's Dove campaign was cited as a success story using 490 creators. The event underscored the creator economy's transition from a niche channel to a core part of the advertising industry.

• UK advertiser spend on creators is projected to reach £1.217bn in 2026, a 26% growth rate.
• US advertiser spend on creators is on track to reach $44bn in 2026, growing four times faster than the overall media industry.
• The IAB announced its Trusted Creator Brand Deal Initiative, set to launch next month, to standardize basic metrics.

YouTube debuts new Creator Shows at the Venice and Toronto International Film Festivals

YouTube announced new Creator Shows debuting at the Venice and Toronto International Film Festivals, along with a YouTube TV setup guide for NFL Kickoff weekend.