Apollo economist says AI has delivered 'zero financial payoff' to companies outside tech
Torsten Slok says profit margins and revenue per worker look flat at large US companies outside the biggest tech firms, TechCrunch reported.
Artificial intelligence has not improved the bottom line of any big corporation outside the tech industry, according to a note from Torsten Slok, chief economist at Apollo Global Management, as reported by TechCrunch. This story rests on that single TechCrunch report.
TechCrunch reported that Slok looked at what he calls the "S&P 493". That is the S&P 500 without Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. According to TechCrunch, he found that profit margins and revenue per worker at these companies appear to be flat, and that there is no evidence AI is improving their productivity.
“Despite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech.”Torsten Slok, chief economist, Apollo Global Management
TechCrunch noted that Apollo, the private equity firm, used to own TechCrunch.
The finding matters because it questions whether spending on AI is paying off for the large majority of big US companies, not just the handful of tech giants that build and sell the technology. TechCrunch also reported that recent studies have found AI has yet to deliver significant productivity gains, though the article does not name those studies.
TechCrunch raised the question of whether non-tech companies are simply behind the tech giants and will catch up. Slok sounded skeptical, the outlet reported. He argued that it will be hard 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," Slok wrote, according to TechCrunch. He added: "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."
Several things are not clear from the report. TechCrunch describes the note only as recently published and does not give its date. The article does not explain how Slok measured profit margins or revenue per worker, what period he looked at, or how he linked those figures to AI use in particular. It also does not say how much the companies in the S&P 493 have spent on AI.
The report also does not include any response from the companies involved, or from economists who might read the same data differently. Whether the flat figures Slok describes will change as companies keep adopting AI remains an open question.
