Apollo Global Management Chief Economist Torsten Slok determined that AI has boosted revenue and margins only for the Magnificent 7, while the rest of corporate America has seen no financial benefit.
He notes that other S&P 500 companies have flat revenue per worker and flat profit margins with no increase in productivity.
Slok put out the note, “No Signs of AI Payoff Outside the Tech Sector,” Saturday in Apollo’s Daily Spark.
Top 10% of firms account for 99.5% of inference spending
Slok splits the index in two. The Magnificent 7 are Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.
The S&P 493 is everything else in the S&P 500.
For the Mag 7, inflation-adjusted revenue per employee is up to about $780,000. The S&P 493 is around $525,000 and has not budged.
Margins divided the same way. The seven giants are close to 30%, with about 10% for the other 493 firms.
“Despite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech,” Slok wrote.
His total factor productivity chart uses the utilization-adjusted series from the San Francisco Fed. No acceleration there, despite all the AI money.
In Slok’s data, the top decile of firms represent 99.5% of model serving and inference expenses and 99% of neocloud expenses.
The same 10% accounts for over 95% of money tied to OpenAI and Anthropic and 95.7% of cloud computing.
Venture money rules the biggest users. 80.4% of the top 1% of AI spenders are backed by VCs compared to 13.1% of the median spender.
Mainstream companies are now treating token spending like a cost center that is harming their margins and pulling back, Slok wrote.
Corporate America doesn’t need the latest model and won’t pay for it, he said. “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.
The S&P 493 will decide the story, the economist concludes
His spending charts are based on Ramp AI Index and Ramp Chief Economist, Ara Kharazian. Cryptopolitan reported this month that corporate AI spending has dropped since July even as usage jumped about 50% to a record, as price competition between OpenAI and Anthropic made models cheaper.
Slok doesn’t think the stragglers just need time. Models continue to get cheaper and more commoditized, and he wonders whether ordinary companies can use them to drive faster revenue growth or wider margins.
“AI may be a great calculator, but in business, intelligence is mostly judgment,” he wrote. Judgment is contextual, Slok said, and the answer depends on which human or model gets asked.
He also wrote that AI “does not understand accountability, trust, culture, unwritten rules, ethical trade-offs or fairness.” He regards those elements as drivers of reputational risk, and ultimately, revenue and profit margins.
“The AI story will be decided in the S&P 493, not the Mag 7,” Slok concluded. He found no evidence yet of better revenue growth or margins outside of tech.
By April, AI-related stocks had hit about 45% of the S&P 500’s market value. During the last 12 months, the Global X Artificial Intelligence & Technology ETF (AIQ) has risen about 20% and the iShares U.S. Technology ETF (IYW) is up about 23%.
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