Apollo’s Slok Says AI Has Delivered Zero Payoff Outside of Tech

Despite the significant investments ploughed into artificial intelligence it has provided “zero payoff” to corporate America outside of technology, according to Apollo Global Management Inc. Chief Economist Torsten Slok.

“Revenue per worker is rising for the Mag 7 but is flat for the S&P 493,” he wrote in a note published Saturday. The same is the case for profit margins, while there are no signs yet of AI boosting productivity growth.

“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 said.

Investors are closely tracking AI expenditures and the expected success of companies in getting a return on investment as the earnings season gets underway. Meta kicked tech results off last week by saying the company intends to bet even more aggressively on AI and boost its capital spending plans. That sparked jitters, sending its shares lower and its credit risk gauge to a record high.

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The unease comes in the wake of other concerns which have weighed on wider sentiment in recent weeks. Comments from CoreWeave Inc. accentuated worries over the extent to which the AI infrastructure buildout is being financed by debt.

Initial public offering plans for Australian data center company Firmus Grid Ltd. collapsed after US fund managers balked at the $30 billion valuation, and another Nvidia Corp.-backed data center developer Nscale Ltd. has faced pushback over its own IPO valuation.

Market research firm Gartner estimated that more than $3.5 trillion of AI infrastructure spending could be at risk of impairment by 2030 should AI revenue fail to justify the spending.

There is widespread optimism that AI will be a significant market driver in the future, though questions persist about whether and when the huge outlay being spent will show up on the bottom line.

Slok said that VC-backed companies are increasingly spending on tokens, though mainstream corporate America doesn’t need the latest model “and is unwilling to pay for it.”

“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,” he wrote.

AI doesn’t understand accountability, ethical trade-offs and trust, “all of which shape reputational risk and ultimately drive revenue growth and profit margins,” Slok added.