The Intelligence Gap: Why AI's Productivity Promise is Stalling for the S&P 493
AI-generated image · Bay Street Wire
Apollo Global Management's chief economist warns that while AI is a 'great calculator,' it cannot replace the human judgment and accountability required to drive actual profit margins.
### The Productivity Paradox
As first reported by TechCrunch, the promise that artificial intelligence will unlock a new era of corporate productivity is hitting a wall for the vast majority of American enterprises. Torsten Slok, chief economist at private equity firm Apollo Global Management, notes that while AI has been marketed as a revolutionary engine for growth, it is failing to move the needle on the balance sheet for most companies.
Analyzing the "S&P 493"—the S&P 500 excluding tech giants Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—Slok found that profit margins and revenue per worker remain flat. His conclusion is blunt: outside of the tech sector, AI has delivered "zero financial payoff" to corporate America.
### The Judgment Deficit
Opinion: The wall companies are hitting is the distinction between intelligence and judgment. Slok argues that while AI may function as a "great calculator," it is fundamentally incapable of understanding the critical frameworks that govern corporate success: accountability, trust, culture, ethical trade-offs, and the unwritten rules of engagement.
These are not "soft skills," but the primary mechanisms that manage reputational risk and drive revenue growth. Slok remains skeptical that non-tech firms will easily catch up to the giants, suggesting it will be an uphill battle to convert "increasingly cheap intelligence" into tangible profit margins. As long as AI is viewed as a substitute for human judgment rather than a supplement to it, the financial payoff for the S&P 493 will likely remain elusive.