Apollo's Top Economist Sees Little Pay Off From AI — Market Talk

What happened

Apollo's chief economist Torsten Slok said in a research note that artificial intelligence has so far only benefited big technology companies financially. Revenue per worker and profit margins are rising for the Magnificent Seven but flat for other S&P 500 companies, with no signs of AI boosting productivity growth.

Confirmed

Global impact / market context

If AI gains stay confined to a few large tech firms, other companies may treat AI spending as a cost rather than a growth investment. That could slow their spending on AI tools and pressure profits, while widening the performance gap between big tech and the rest of the market.

Analyst inference

Investors have paid high prices for AI-linked companies on expectations of broad gains. Slok's view suggests those expectations may be too wide, because mainstream firms are pulling back on token spending, which means usage fees for AI services, and see it as a cost weighing on profit per sale.

Analyst inference

What to watch

1. Slok said revenue per worker and profit margins are rising for the Magnificent Seven tech companies but have remained flat for the rest of the S&P 500 members. Confirmed
2. Watch whether mainstream companies disclose cuts to AI token spending, which means usage fees for AI services, in coming earnings reports, and whether they describe that spending as a cost rather than growth. Proposed
3. Track productivity data and profit margins outside big tech to see if AI benefits spread; continued flatness would support Slok's view that AI is not yet lifting the wider economy. Analyst inference

Evidence

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