AI Delivers Zero Financial Payoff Outside Tech, Slok Says
Apollo Global Management Chief Economist Torsten Slok says major companies outside the technology sector have yet to show financial gains from AI. His analysis…
Apollo Global Management Chief Economist Torsten Slok says AI delivers zero financial payoff to corporate America outside the technology sector, with major companies yet to show gains in profit margins, revenue per worker or productivity. His analysis puts a practical question at the center of the AI investment boom: are businesses getting measurable returns, or paying for a technology that has not yet improved their results?
Slok examined what he calls the S&P 493: the S&P 500 minus Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. He found revenue per worker and profit margins appear flat for that group, with no evidence that AI is lifting productivity.
Companies weigh token costs against returns
“Despite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech,” Slok said in a note published by Apollo Global Management.
The finding matters for companies deciding whether to expand AI use and for investors trying to judge whether current spending can translate into earnings. Slok wrote that mainstream corporate America is beginning to see token spending less as a growth driver and more as a cost that can weigh on margins.
“Mainstream corporate America is pulling back and starting to view token spending not as a source of growth but as a cost center that weighs on margins,” he said, according to Bloomberg.
That concern is distinct from whether AI tools can perform useful tasks. Slok argued that businesses may struggle to turn cheaper access to AI into faster revenue growth and higher margins, because business decisions also depend on judgment and organizational factors.
“AI may be a great calculator, but in business, intelligence is mostly judgment,” Slok wrote. He said accountability, trust, culture, unwritten rules, ethical trade-offs and fairness shape reputational risk, which in turn can affect revenue growth and profit margins.
Investors look for evidence in company spending
The question of returns has drawn attention as companies report earnings and investors track AI expenditures. Bloomberg reported that Meta said it planned to invest more aggressively in AI and raise its capital spending plans. The announcement sent its shares lower and its credit risk gauge to a record high, the report said.
Concerns also extend to the cost of building AI infrastructure. Bloomberg reported that comments from CoreWeave heightened worries about the extent to which that expansion is financed with debt. Plans for an initial public offering by Australian data center company Firmus Grid collapsed after US fund managers balked at a $30 billion valuation, while Nvidia-backed developer Nscale faced pushback over its own IPO valuation.
The scale of possible losses could be substantial if revenue does not catch up with infrastructure costs. Gartner estimated that more than $3.5 trillion of AI infrastructure spending could be at risk of impairment by 2030 if AI revenue fails to justify the investment, according to Bloomberg.
Slok said venture-capital-backed companies are spending increasingly on tokens, but he argued that mainstream businesses do not need the latest model and are unwilling to pay for it. The distinction leaves AI providers facing a difficult test: demonstrate business value beyond the technology sector, or risk seeing customers treat usage as an expense to contain.
“As long as agentic AI and token spending are confined to a small part of the economy, the macroeconomic effects of AI will be very limited,” Slok wrote.
Source: techcrunch.com
