Apollo Economist Slok: AI Dividend Benefits Only the Magnificent Seven, No Returns Seen for S&P 493

According to Slok's analysis in his Daily Spark column, despite the enormous sums invested in the latest advances in large language model research and the tremendous fanfare surrounding them, artificial intelligence has so far delivered no financial returns for the corporate world outside the U.S. tech industry. A handful of tech-related companies have indeed reaped substantial gains, but the vast majority of companies in the S&P 500 are seeing almost no results from their investments in generative AI or large language models.

Slok points out that, after adjusting for inflation, revenue per capita is rising only at the "Magnificent Seven" tech giants—the most heavily tech-weighted portion of the S&P 500, comprising Nvidia, Tesla, Amazon, Microsoft, Google parent Alphabet, Apple and Meta. Profit margins for this group are rising as well. He refers to the rest of the index's companies as the "S&P 493," where both revenue per capita and profit margins are flat.

Moreover, the Apollo economist sees no sign of AI driving productivity growth. Put simply, generative AI and large language models have had no effect on corporate profits outside the tech industry. With no tangible results to show, mainstream S&P 500 companies have begun scaling back the enormous spending AI requires, treating token consumption as a cost that drags down profit margins rather than as a potential source of future growth.

Venture capital-backed companies keep increasing their spending on AI tokens, while mainstream enterprises neither need the latest models nor are willing to pay for them. Slok says that if AI remains confined to a very small part of the overall economy, its macroeconomic effects will be very limited.

AI models may become increasingly commoditized, and tokens may eventually become cheap enough to drive revenue growth and margin expansion. But Slok believes this grand goal may prove far harder to achieve than it sounds. He describes AI as a powerful "calculator," but stresses that businesses run on good judgment, not on number crunching.

"AI does not understand accountability, trust, culture, unwritten rules, moral trade-offs or fairness, and all of these factors shape reputational risk and ultimately drive revenue growth and margin improvement," Slok wrote in the article. In his view, the ultimate direction of the AI narrative will be determined by the "S&P 493," not by the financial splendor of the Magnificent Seven.

Apollo, the firm Slok works for, manages about $1 trillion in assets, so his judgments on the economy carry considerable weight. His views also echo other cautionary reports; Gartner recently estimated that more than $3.5 trillion in AI infrastructure investment could face impairment by the end of 2030. But not everyone holds such a pessimistic view—Goldman Sachs economist Jan Hatzius believes AI investment will ultimately translate into higher productivity and economy-wide profit returns.