At the seven largest tech companies, revenue per worker keeps going up. Across the remaining 493 companies in the S&P 500, it hasn’t moved.
Torsten Slok, chief economist at Apollo Global Management, flagged that divide in a note published over the weekend. In his view, AI has yet to hand businesses outside tech any real economic edge. His phrase for it was “zero financial payoff.”
“Revenue per worker is rising for the Mag 7 but is flat for the S&P 493,” Slok said. “Profit margins are rising for the Mag 7 but are flat for the S&P 493,” he continued, noting that “there are still no signs of AI boosting productivity growth.”
Why the other 493 matter
Slok’s case is straightforward. The firms selling AI are in good shape. What counts is whether the firms paying for it see the results in their financials, and for most of corporate America, that hasn’t happened yet.
“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,” Slok said.
The picture doesn’t improve on closer inspection. Frontier models have become far more expensive to use, which is nudging companies toward cheaper alternatives. Nobody has shown yet that an ordinary business benefits from technology advanced enough to detect cybersecurity threats easily or break into someone else’s servers on its own.
“Mainstream 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,” Slok said.
Goldman’s chief says the bank can skip frontier models
Signs of that retreat turn up in unexpected spots. Goldman Sachs has just unveiled an AI initiative worth half a billion dollars. Even so, CEO David Solomon told investors last week that “there’s very little that we do where we need frontier models,” according to Fortune.
Solomon added that the “bigger-picture frontier issues that are getting a lot of attention” are “really separate from using the base tools that exist to support your businesses.”
That leaves one of Wall Street’s largest banks putting serious money into AI while the person running it downplays the priciest piece of the technology.
Musk and analysts share the unease
Other skeptics have joined Slok. Over the weekend, SpaceX CEO Elon Musk said putting money into AI cloud computing companies is a bad idea and could lead to “guppy-level death and consolidation.”
Analysts have also questioned whether CoreWeave, a leading hyperscaler, might soon buckle under its own weight. They note it has piled up more than $50 billion in debt and is going through cash at an alarming pace.
Investors return to one worry again and again: an AI bubble that pops and sends shockwaves NEUROS $0.0004606 ▲ +3.2% through the global economy. Capital keeps flooding in, while a real return on it still seems a long way off.
Anthropic’s IPO filing comes at a tricky moment
This week brings a public test for the sector. Anthropic has formally filed to go public, and the paperwork shows the company burned through $80.7 billion in the first half of this year alone.
The figure arrives just as executives are asking whether AI justifies its price. According to Slok’s note, the 493 companies he tracks haven’t seen it pay off so far. Their revenue per worker is flat, and so are their profit margins.