"Despite massive investments and widespread hype around AI , the technology has delivered zero financial payoff to corporate America outside of tech," writes the chief economist at U.S. asset management firm Apollo Global. He adds that "there are still no signs of AI boosting productivity growth... [M]ainstream corporate America is pulling back and starting to view token spending not as a source of growth but as a cost center that weighs on margins." VC-backed companies are spending more and more on tokens, but mainstream corporate America does not need the latest model and is unwilling to pay for it. As long as agentic AI and token spending are confined to a small part of the economy, the macroeconomic effects of AI will be very limited... The question looking ahead is whether, even as models become commoditized, mainstream corporate America can turn increasingly cheap intelligence into higher revenue growth and higher profit margins. That may be harder than it sounds. AI may be a great calculator, but in business, intelligence is mostly judgment. Judgment depends on context, and the answer varies with which human or which model you ask. Perhaps most importantly, 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. The bottom line is that the AI story will be decided in the S&P 493, not the Mag 7, and so far, there is no evidence that revenue growth or margins are improving outside the tech sector. More details from 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... Recent studies have also found that AI has yet to deliver significant productivity gains.

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