Dollar's Vulnerability to AI Pullback: Apollo's Warning Creates Mixed Market Impact

Apollo Global Management’s leadership has raised concerns about the sustainability of the AI-driven investment frenzy, warning that the dollar faces significant risks if this momentum reverses. Inflationary pressures and central bank uncertainty over interest rate policies are casting doubt on AI investments, while factors reinforcing the dollar’s reserve currency status are simultaneously weakening. This conflicting dynamic threatens the pursuit of a sustainable growth model, particularly through the production capacities of critical supply chain players like ASML and TSMC, and the performance of technology firms such as Nvidia.

The Declining Dollar Hegemony in AI-Driven Markets

■AI investments are reshaping foreign exchange flows regionally due to energy consumption and hardware costs.

■The competition over rare earth elements between China and the U.S. could signal strategic vulnerabilities for the dollar.

■As central banks view AI sector volatility as a risk, their reliance on dollar-denominated reserves is declining.

Technology Supply Chains at the Epicenter of Currency Crisis

■ASML’s EUV lithography machines play a critical role in AI chip production, while TSMC’s capacity constraints threaten price stability.

■Companies like Nvidia and other AI hardware producers are increasing costs amid dollar weakness, heightening investor risk perception.

■Break points in the global supply chain are eroding dollar’s reserve currency status through currency instability.

While the probability remains low, the contradiction in the dollar’s reserve currency role emerges sharply if AI investments face sustainability questions. The impact of supply chain dynamics, especially at critical nodes like TSMC and ASML, on exchange balances will become more pronounced in the near term.