A recent memo from the chief economist at Apollo Global Management (the private equity giant that previously owned TechCrunch) says that AI is not benefiting the bottom lines of large companies outside the tech industry.
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) and finds that profit margins and revenue per worker appear to be flat, and there is no evidence that AI is improving productivity.
“Despite the huge investments and widespread hype around artificial intelligence, this technology has not brought economic benefits to American companies outside of technology,” Slok said.
Is this simply a matter of non-tech companies lagging behind the tech giants? Mr. Throck seemed skeptical, arguing that it would be difficult for American companies to “translate increasingly cheap intelligence into higher revenue growth and higher profit margins.”
“AI may be a great calculator, but in business, intelligence is primarily judgment,” he wrote, adding, “AI does not understand accountability, trust, culture, unwritten rules, ethical trade-offs, and fairness, all of which form reputational risk and ultimately drive revenue growth and profit margins.”
Recent studies have also found that AI has yet to deliver significant productivity gains.
