Apollo: No AI Payoff Outside Tech Sector Yet
Apollo chief economist Torsten Slok says AI has delivered zero financial payoff outside big tech, with revenue and margins flat for the other 493 S&P 500 firms.
Apollo Global Management chief economist Torsten Slok has delivered a blunt verdict on the AI boom: outside the tech sector, it has not paid off yet. In a note published on October 24, titled "No Signs of AI Payoff Outside the Tech Sector," Slok argues that the technology has delivered zero financial payoff to corporate America outside of tech so far. The warning landed as AI-related stocks fell during the week, with traders questioning how long the huge spending on data centers and chips can go on. It is a challenge to the core promise of the AI trade: that spending today will turn into profits across the whole economy tomorrow.
What Apollo found
Slok's case rests on two simple measures. For the Magnificent Seven tech giants, revenue per worker and profit margins are rising. For the other 493 companies in the S&P 500, both measures are flat. In other words, the companies building and selling AI are pulling away, while the companies supposed to be using it show no improvement yet. Slok also points to the San Francisco Federal Reserve's productivity series, which he says shows no sign yet that AI has lifted overall productivity growth. His conclusion is plain: mainstream corporate America is starting to view token spending as a cost center, not a growth driver. Many of those firms, he writes, do not need the latest AI model and are unwilling to pay for it.
Why the Mag 7 split matters
The split matters because the AI trade will be decided by users, not just builders. If only a handful of tech giants benefit, the economic case for hundreds of billions in new data centers gets weaker. Slok has warned all week about the same problem from different angles. Earlier notes flagged slowing token spending growth and a "circularity" problem: AI firms funding or guaranteeing debt for companies that are also their top customers, which raises questions about how sustainable that growth is. He added a similar point about startups, saying 80 percent of the top 1 percent of AI spenders are backed by venture capital. In his view, that means some startups are paying their compute bills with investment money rather than money earned from customers.
The cost-center warning
"AI may be a great calculator, but in business, intelligence is mostly judgment," Slok wrote. "Judgment depends on context, and the answer varies with which human or which model you ask." He argues 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. That gap, he says, is why cheaper and more widely available AI may still not lift mainstream firms' financial results. The timing adds weight to the warning. A handful of hyperscalers plan to spend an estimated $800 billion this year, with capital spending next year seen topping $1 trillion. Meta alone plans to spend $135 billion to $145 billion this year, and the cost of insuring its debt against default touched a record on Thursday. Smaller AI firms are also under pressure: CoreWeave stock has crashed more than 30 percent this month. "Maybe that will come in the future. Maybe not," Slok warned about the payoff.
What to watch next
Slok's note is a measure of what has happened so far, not proof of what happens next. The payoff could still arrive as AI tools spread further and companies learn to use them well. But his test is now clear: watch revenue per worker, profit margins and productivity outside the tech sector. If those numbers stay flat while AI spending keeps climbing past $1 trillion, the pressure on AI stocks will grow. If they start to move, the bull case gets its missing evidence.
Sources
- Apollo Global Management - https://www.apollo.com/wealth/insights-news/insights/daily-spark/no-signs-of-ai-payoff-outside-the-tech-sector - Fortune - https://dnyuz.com/2026/10/24/heres-the-core-economic-flaw-in-the-ai-bull-case-as-stock-and-bond-trades-unravel-according-to-a-top-economist/ - Paktechstan - https://paktechstan.com/article/apollo-warns-ai-has-delivered-no-payoff-outside-big-tech-the-other-493-s-p-500-firms-are-flat