Apollo's chief economist says AI has yet to pay off outside the tech sector

what happened

Torsten Slok, chief economist at Apollo Global Management, said artificial intelligence has not yet produced measurable gains in productivity or profits for most companies outside the technology sector. Seeking Alpha reported the comments from a note Slok published on Saturday.

According to Slok, revenue per worker is climbing at the Mag 7 companies but has stalled across the S&P 493. The gap is also visible in profit margins. He argued that mainstream firms are beginning to treat spending on AI tokens as a cost that squeezes margins rather than a source of growth. In his words, "the AI story will be decided in the S&P 493, not the Mag 7."

Investors are looking more closely at AI spending and returns as companies expand infrastructure budgets. Meta Platforms' plan to raise capital expenditure last week added to unease, with its shares falling and its credit risk gauge hitting a record. Australia's Firmus Grid dropped its IPO after investors pushed back on a proposed $30 billion valuation. Gartner estimates that over $3.5 trillion of AI infrastructure outlays could be written down by 2030 if revenue does not justify them.

why it matters

For markets, Slok's argument suggests that gains in the broad index rest heavily on a handful of large technology names. If profits at the other 493 companies do not start to grow, doubts about the payback on AI spending may persist and credit conditions for AI infrastructure firms could tighten.

market impact

Mag 7 and AI infrastructure: doubts about spending payback pressure the sector

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