AI has paid nothing to companies outside tech so far, says Apollo's Torsten Slok
The Apollo Global Management chief economist finds flat margins and flat revenue per worker across the S&P 500 once the seven tech giants are stripped out.
Key points
- Torsten Slok says AI has delivered zero financial payoff to corporate America outside tech.
- He looked at the S&P 493, the index minus Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.
- Business runs on judgment, which AI does not have, he argued.
Artificial intelligence has so far brought “zero financial payoff to corporate America outside of tech”, according to Torsten Slok, chief economist at the investment firm Apollo Global Management.
In a note published by Apollo, Slok looked at what he calls the S&P 493: the S&P 500 index of large American companies without its seven biggest technology names, Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. Across that group, he found, profit margins and revenue per worker have stayed flat. He saw no sign in the numbers that AI is making these companies more productive.
Slok does not buy the argument that ordinary firms are simply a few years behind the tech giants and will catch up. Turning cheap AI into higher revenue and wider margins will be hard, he argued, because most business decisions rest on qualities the software lacks.
“AI may be a great calculator, but in business, intelligence is mostly judgment,” he wrote. “AI does not understand accountability, trust, culture, unwritten rules, ethical trade-offs or fairness.”
His finding matches several recent studies, which have also concluded that AI has yet to deliver significant productivity gains for the wider economy.
The seven companies he left out include the biggest makers and sellers of AI chips, cloud computing and chatbots. Slok’s point is that the rest of corporate America, the firms meant to be their customers, has little yet to show for the technology on the bottom line.