Apollo says AI has delivered 'zero financial payoff' outside the tech industry

One of the world's largest investment firms isn't bullish on AI.

Michael M. Santiago/Getty Images

• Only tech companies are seeing growth from the AI boom, Apollo Global Management says.
• Apollo says that though some big companies are spending big on AI, they may soon pull back.
• Corporate America is starting to see AI spending not as a source of growth, but as a cost center.

One of the world's largest investment firms says that only tech companies are getting a share of the AI pie.

In an economic analysis published on Saturday, Apollo Global Management said that while the Magnificent Seven — a group of established tech companies that includes Nvidia and Meta — are seeing revenue growth during the AI boom, this growth isn't being shared by other industries.

"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," Torsten Slok, a partner and chief economist at Apollo, said in the report. "The technology has delivered zero financial payoff to corporate America outside of tech."

In a series of graphs, Slok measured three main metrics that have boomed for tech companies but not for regular companies: revenue per worker, profit margins, and productivity growth.

Since 2022, revenue per employee figures have skyrocketed for tech companies — rising from $550,000 to nearly $800,000 today. Meanwhile, that figure hasn't changed much for everyone else in the S&P 500, lingering around $550,000 for the last seven years.

Similarly, while profit margins soared among tech companies since 2022, they've stagnated at about 10% for everyone else.

And across the economy, AI hasn't yet dramatically increased productivity growth as some AI optimists have predicted.

Apollo's research portends a dark shadow over a US economy throwing massive amounts of dough toward AI tools and companies, whose leaders have promised that an "age of abundance," where people won't have to work as much, will soon be upon us.

"The question looking ahead is whether, even as models become commoditized, mainstream corporate America can turn increasingly cheap intelligence into higher revenue growth and higher profit margins," Slok said.

"That may be harder than it sounds," he added.

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