Apollo economist questions whether AI spending is reaching non-tech margins

Torsten Slok’s analysis compares the largest technology stocks with the rest of the S&P 500; aggregate trends cannot settle every company’s return.

Apollo chief economist Torsten Slok argues that the financial benefits of AI have yet to appear clearly across the broader US corporate sector. His October 24 note compares the technology-focused stocks known as the Magnificent Seven with the other 493 companies in the S&P 500.

Slok points to rising revenue per worker and profit margins in the technology group alongside flatter trends in the remainder. He also examines productivity data and the concentration of AI spending. His conclusion is an interpretation of those aggregate indicators, rather than a direct audit of individual companies’ AI projects.

What the comparison can show

The revenue-per-worker chart is adjusted for inflation to the final quarter of 2019. The productivity discussion uses a utilisation-adjusted total factor productivity series from the San Francisco Fed. These are broad economic and corporate measures.

They can challenge an assumption that heavy AI spending already guarantees a visible economy-wide payoff. They cannot establish that no non-technology business has benefited, or isolate AI from every other influence on margins.

Costs arrive before a durable result

Slok’s argument is that cheaper intelligence still has to become better commercial judgement and useful work. That puts attention on the link between a model’s output and an organisation’s actual operating result.

For a company assessing its own investment, the relevant comparison remains a defined workflow before and after the change, with implementation and recurring costs included. The note provides a sceptical macroeconomic perspective; it does not substitute for those project records or offer a prediction for any individual share price.

Sources

- [No Signs of AI Payoff Outside the Tech Sector](https://www.apollo.com/wealth/insights-news/insights/daily-spark/no-signs-of-ai-payoff-outside-the-tech-sector) — Apollo — Torsten Slok