AI delivers ‘zero financial payoff’ to most companies, Apollo economist says

AI hasn’t 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).

Apollo’s Torsten Slok focuses on what he calls the S&P 493 — the S&P 500, minus Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — finding that profit margins and revenue per worker appear to be flat, with no evidence that AI is improving productivity.

“Despite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech,” 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 “turn increasingly cheap intelligence into higher revenue growth and higher profit margins.”

“AI may be a great calculator, but in business, intelligence is mostly judgment,” he wrote, later adding, “AI 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.”

Recent studies have also found that AI has yet to deliver significant productivity gains.

Buy One Pass, Get a Second Free

Cover more ground at TechCrunch’s ultimate founder bootcamp of the year by bringing your co-founder or partner for free

Book before the BOGO deal expires

Every weekday and Sunday, you can get the best of TechCrunch’s coverage.

TechCrunch Mobility is your destination for transportation news and insight.

Startups are the core of TechCrunch, so get our best coverage delivered weekly.

Provides movers and shakers with the info they need to start their day.

By submitting your email, you agree to our Terms and Privacy Notice.