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Apollo Says AI Has Shown ‘Zero’ Payoff Outside Tech

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Apollo Says AI Has Shown ‘Zero’ Payoff Outside Tech

Corporate America has invested heavily in artificial intelligence in the last few years.

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So far, these efforts haven’t yielded much in the way of results, Apollo Global Management Chief Economist Torsten Slok wrote in a note Saturday (Oct. 24).

“Despite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech,” Slok wrote.

“Revenue per worker is rising for the Mag 7 but is flat for the S&P 493,” he added, referring to the “Magnificent 7” companies (Amazon, Apple, Google, Meta, Microsoft, Nvidia and Tesla).

The note said that mainstream corporate America has begun “pulling back and starting to view token spending not as a source of growth but as a cost center that weighs on margins.”

Slok’s comments were flagged in a report by Bloomberg News on Sunday (Oct. 25), which noted that investors are closely following AI spending and the success of companies seeing a return on their expenditures as earnings season gets started.

Meta reported its numbers last week and said it expects to be even more aggressive in its AI-related capital expenditures, sending its shares down, the report added.

As covered here last week, Meta spent $34.9 billion on capital expenditures during its third quarter while reporting negative free cash flow of $2.1 billion.

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