One of the world’s largest investment firms says only tech companies are getting a piece of the AI pie.
In an economic analysis released Saturday, Apollo Global Management said that while the Magnificent Seven — a group of established technology companies that includes Nvidia and Meta — are seeing revenue increases during the AI boom, that growth is not shared by other sectors.
“Large U.S. companies are stepping back and starting to view token spending not as a source of growth but as a cost center that squeezes margins,” Torsten Slok, partner and chief economist at Apollo, said in the report. “Technology has brought no financial gain to American businesses outside of technology.”
In a series of charts, Slok measured three main indicators that have exploded for tech companies but not for traditional companies: revenue per worker, profit margins and productivity growth.
Since 2022, revenue per employee has skyrocketed for tech companies, from $550,000 to nearly $800,000 today. Meanwhile, that number hasn’t changed much for everyone else in the S&P 500, hovering around $550,000 for the past seven years.
Likewise, while profit margins for tech companies have soared since 2022, they have stagnated at around 10% for everyone else.
And across the economy, AI has yet to dramatically increase productivity growth as some AI optimists predicted.
Apollo’s research casts a dark shadow over a U.S. economy that is throwing huge sums of money at AI tools and companies, whose executives have promised that an “age of abundance,” where people don’t have to work as much, would soon be upon us.
“The question going forward is whether, even if models become commoditized, large American companies can turn increasingly cheap intelligence into higher revenue growth and profit margins,” Slok said.
“It may be more difficult than it seems,” he added.
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