Apollo
Apollo chief economist says AI has not paid off outside tech
Apollo chief economist Torsten Slok said AI has delivered no financial payoff outside tech, with revenue and margins flat across the rest of the S&P 500.
Apollo Global Management chief economist Torsten Slok said AI has delivered no financial payoff to corporate America outside the technology sector, and that mainstream companies are unwilling to pay for the latest models.
Slok made the case in a note titled “No Signs of AI Payoff Outside the Tech Sector,” published Oct. 24, 2026 in Apollo’s Daily Spark.
Revenue and Margins Are Flat Outside the Mag 7
Revenue per worker and profit margins are rising for the Mag 7 but flat for the S&P 493, the rest of the S&P 500, the note said. It also found no sign of AI lifting productivity growth, drawing on San Francisco Fed and Bureau of Labor Statistics data.
Token Spending Is Becoming a Cost
Mainstream companies are starting to treat token spending as a cost center that weighs on margins, the note said. VC-backed companies are spending more on tokens, but mainstream corporate America “does not need the latest model and is unwilling to pay for it.”
The note said the macroeconomic effects of AI will be very limited while agentic AI and token spending stay confined to a small part of the economy. Its charts use Ramp AI Index data.
Cheaper Intelligence Meets Judgment
The note asked whether mainstream companies can turn cheaper intelligence into higher revenue growth and margins. “That may be harder than it sounds,” it said. Intelligence in business is mostly judgment, the note said, and AI “does not understand accountability, trust, culture, unwritten rules, ethical trade-offs or fairness.”
It ends by saying “the AI story will be decided in the S&P 493, not the Mag 7, and so far, there is no evidence that revenue growth or margins are improving outside the tech sector.”
Reactions to the Note
Economist Brad DeLong responded to the note Oct. 24 on Substack. DeLong said the charts show “the tip cracks and the body moves fast, but the handle, the S&P 493, doesn’t budge.” AI’s biggest effects may come through channels shareholders cannot easily capture, DeLong said, such as surplus going to users, new businesses entering and platform incumbents locking in customers.
Constellation Research quoted the note this week and wrote that Anthropic and OpenAI do not have much of a moat. It reported that IBM CEO Arvind Krishna, SAP CEO Christian Klein and Meta CFO Susan Li have talked about using open models. Constellation said the models deliver performance for much less. “Would you like something that’s 10% of the cost if it’s 90% as good as the best?” Krishna asked.
Analysis
We think the two reports describe one pressure on the labs. The note says mainstream companies are unwilling to pay for the latest models, and Constellation reports that executives at IBM, SAP and Meta have talked about using open models that cost much less.