Artificial intelligence has not yet positively impacted the financial performance of major companies beyond the technology sector, a recent report from the chief economist at Apollo Global Management (the private equity firm that formerly owned TechCrunch) indicates.
Torsten Slok of Apollo directed his analysis towards what he terms the S&P 493 — comprising the S&P 500 excluding prominent tech companies like Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla — observing stagnation in profit margins and revenue per employee, suggesting no clear signs of AI-driven productivity enhancements.
“Despite substantial investments and widespread enthusiasm surrounding artificial intelligence, the technology has generated zero financial return for corporate America beyond the tech sector,” Slok commented.
Is this merely an issue of non-technology firms trailing the leading tech enterprises? Slok expressed skepticism, contending that it would be challenging for businesses across America to “convert increasingly affordable intelligence into elevated revenue growth and improved profit margins.”
He elaborated, “While AI might excel as a sophisticated calculator, business intelligence primarily relies on judgment,” and further asserted, “AI lacks comprehension of accountability, trust, culture, implicit norms, ethical considerations, or fairness; these elements collectively influence reputational risk and are ultimately instrumental in boosting revenue and profit.”
Furthermore, various recent analyses have also indicated that AI has yet to yield substantial improvements in productivity.