Apollo's Chief Economist Looked at 493 of America's 500 Biggest Companies and Found AI Has Paid Off for None of Them. The Seven Selling It Took the Whole Gain, and Wall Street Spent the Week Dumping the Builders
About This Episode
In a note published Saturday, October 24, Apollo Global Management chief economist Torsten Slok wrote that AI 'has delivered zero financial payoff to corporate America outside of tech': revenue per worker and profit margins are rising for the Magnificent 7 and flat for the other 493 S&P 500 companies, and total factor productivity growth sits near zero. His charts show AI spending is overwhelmingly concentrated in a thin, venture-backed top tier, while mainstream firms treat token spending as a cost center and pull back. The note landed in a week when the Nasdaq fell 694 points on doubts AI capex will pay off and data-center builders dropped a median 23% from their October 6 peak.
Our Take
The companies buying AI are paying the bill now and showing nothing for it, the seven selling it are keeping the whole gain, and the open question for a listener's job and 401(k) is whether this is the trough of a curve that turns up or the verdict on a tool that was oversold.
Continue Reading on Unscarcity
The Abundance J-Curve: Why Cheap Later Means Expensive Now
Slok's flat margins and near-zero productivity are exactly the down-stroke of the productivity J-curve the article describes, where a general-purpose technology's costs are expensed years before its output is counted, so the hosts can ask whether the 493 are in the trough or looking at the verdict.
Value Migration: When the Input Goes Free, Where Does the Money Go?
The note shows the gain from cheap intelligence did not vanish but landed on seven firms that own compute, distribution and the trust layer, which is the article's map of where margin migrates when the input commoditizes; Slok's 'intelligence is mostly judgment' line is the trust-and-accountability stop on that map.