Apollo Chief Economist Says AI Has Not Delivered Financial Returns for Most Companies
Torsten Slok, chief economist at Apollo Global Management, said in a report that the profit margins and revenue per employee of the S&P 493 companies—excluding Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla—have remained essentially flat, with no evidence that AI has improved productivity. He said that despite massive investment and intense hype around AI, the technology has delivered zero financial return for U.S. companies outside the tech industry. Slok believes it is difficult for companies to convert increasingly cheap intelligence into higher revenue growth and profit margins, and said AI may be a very powerful calculator, but intelligence in business is more about judgment.
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Apollo's chief economist uses S&P 493 data to show that AI investment has not yet translated into profit margin and revenue-per-employee growth, and offers an explanation for the difference between intelligence and judgment.
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AI hasn’t benefited the bottom line of any big corporations outside the tech industry, according to a note recently published by the chief economist at Apollo Global Management (the private equity giant that used to own TechCrunch).
Apollo’s Torsten Slok focuses on what he calls the S&P 493 — the S&P 500, minus Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — finding that profit margins and revenue per worker appear to be flat, with no evidence that AI is improving productivity.
“Despite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech,” Slok said.
Is this simply a matter of non-tech companies lagging behind the tech giants? Slok sounded skeptical, arguing that it will be tough for corporate America to “turn increasingly cheap intelligence into higher revenue growth and higher profit margins.”
“AI may be a great calculator, but in business, intelligence is mostly judgment,” he wrote, later adding, “AI does not understand accountability, trust, culture, unwritten rules, ethical trade-offs or fairness, all of which shape reputational risk and ultimately drive revenue growth and profit margins.”
Recent studies have also found that AI has yet to deliver significant productivity gains .