Apollo Chief Economist: AI Has Yet to Deliver Returns for US Companies Outside Tech

October 25 — Torsten Slok, chief economist at Apollo Global Management, said that despite massive corporate spending on artificial intelligence, AI has yet to deliver any real returns for US companies outside the tech industry. Slok wrote: "Revenue per employee is growing at the Magnificent 7, but it is flat at the other 493 companies in the S&P 500." Corporate profit margins show the same picture, and there is no sign yet that AI is driving productivity growth.

Slok said: "Mainstream US companies are pulling back on spending and are starting to treat AI token consumption spending as a cost center rather than a growth source, because these outlays are squeezing profit margins." As the earnings season gets underway, investors are watching companies' AI spending closely, and whether the related investments can deliver the expected returns. Last week, Meta was the first to report earnings-related developments in the tech sector, saying it plans to bet more aggressively on AI and to raise its capital expenditure plans. The statement unsettled the market, sending Meta's shares lower and pushing its credit risk indicator to a record high.