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AI delivers âÂÂzero financial payoffâ to most companies, Apollo economist says
AI hasnâÂÂt benefited the bottom line of any big corporations outside the tech industry, according to a note recently published by the chief economist at Apollo Global Management (the private equity giant that used to own TechCrunch).
ApolloâÂÂs Torsten Slok focuses on what he calls the S&P 493 â the S&P 500, minus Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla â finding that profit margins and revenue per worker appear to be flat, with no evidence that AI is improving productivity.
âÂÂDespite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech,â Slok said.
Is this simply a matter of non-tech companies lagging behind the tech giants? Slok sounded skeptical, arguing that it will be tough for corporate America to âÂÂturn increasingly cheap intelligence into higher revenue growth and higher profit margins.âÂÂ
âÂÂAI may be a great calculator, but in business, intelligence is mostly judgment,â he wrote, later adding, âÂÂAI does not understand accountability, trust, culture, unwritten rules, ethical trade-offs or fairness, all of which shape reputational risk and ultimately drive revenue growth and profit margins.âÂÂ
Recent studies have also found that AI has yet to deliver significant productivity gains.
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