New York, 24 October. Torsten Slok, chief economist at the investment firm Apollo Global Management, has concluded that outside the tech sector artificial intelligence has so far delivered no financial payoff to the largest US companies: revenue per employee and profit margins are rising only at the seven technology giants and are flat at the other 493 companies in the S&P 500 index, his note says.
The S&P 500 is an index of the 500 largest listed US companies. The market calls Alphabet (Google), Amazon, Apple, Meta, Microsoft, Nvidia and Tesla the “Magnificent Seven”; Slok refers to the remaining 493 as the “S&P 493”. According to his charts, inflation-adjusted revenue per employee at the seven rose from about $550,000 in 2022 to nearly $800,000 in 2026, while at the rest it has stayed around $550,000 since 2019. The seven’s profit margin has been rising since the third quarter of 2023 and, by estimates read from the chart, is approaching 30%, compared with about 10% for the rest. Nor, according to Slok’s data, are there yet any signs that AI has accelerated productivity growth across the economy.
“With no impact on the bottom line, 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,” Slok wrote. According to him, venture-backed companies are spending more and more on tokens, while mainstream businesses do not need the latest models and are unwilling to pay for them. “As long as agentic AI and token spending are confined to a small part of the economy, the macroeconomic effects of AI will be very limited,” the economist believes.
Slok frames the question for the future as whether mainstream businesses can turn increasingly cheap intelligence into higher revenue and margins as models become commoditised. “AI may be a great calculator, but in business, intelligence is mostly judgment,” he writes, adding that AI does not understand accountability, trust, culture, unwritten rules or fairness, on which reputation and ultimately profits depend. The note concludes that the AI story will be decided in the “S&P 493”, not among the seven.
Apollo’s assessment is not the only one. Goldman Sachs chief economist Jan Hatzius sees clearer signs at the same time that AI’s impact is spreading beyond the tech sector, although he believes AI’s contribution to US economic growth is close to its peak.
What it means: The money from the AI boom is so far staying with those who sell models, chips and cloud capacity, while at ordinary large companies AI spending is not turning into profit. If that continues, mainstream businesses will start cutting this spending.
Who benefits: The tech giants already enjoy rising revenue and margins. Apollo’s finding gives other companies an argument for spending more cautiously on AI, and warns model providers that demand outside the tech sector may prove weaker than expected.
Background: Apollo Global Management is a US investment firm working in private credit and private equity. Slok writes its daily newsletter, The Daily Spark; the note was published on 24 October.
We have also reported that Microsoft offered staff voluntary departure.
