Artificial intelligence has yet to deliver significant financial benefits to major corporations outside the technology sector, according to Torsten Slok, chief economist at Apollo Global Management.

In a recent analysis, Slok examined the performance of 493 companies in the S&P 500 after excluding major technology firms, including Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.

His findings suggest that profit margins and revenue per employee have remained largely unchanged, indicating that widespread AI adoption has not yet translated into measurable productivity improvements for most businesses.

Slok argued that despite substantial investments and growing enthusiasm for artificial intelligence, many companies have struggled to convert the technology into stronger financial performance.

His analysis raises questions about whether businesses outside the technology industry will achieve the same benefits anticipated by investors and technology executives.

Although AI tools can perform certain tasks quickly and efficiently, their ability to generate additional revenue or significantly reduce operating costs remains uncertain across many sectors.

The economist also questioned whether the situation simply reflects the slower adoption of AI by traditional businesses.

He suggested that making intelligence cheaper does not automatically translate into higher revenue growth or improved profit margins.

According to Slok, successful business decisions require more than information processing because they involve judgment, accountability, trust, organisational culture, ethical considerations and an understanding of unwritten rules.

These factors can influence customer relationships, corporate reputation and long term financial performance.

Slok’s assessment is consistent with other research suggesting that the productivity benefits of artificial intelligence have been slower to emerge than some businesses initially expected.

While companies are increasingly incorporating AI into customer service, administration, research and other operations, the overall economic impact remains difficult to measure.

Some organisations may be benefiting from specific applications, but these gains have not yet translated into broad improvements across the wider corporate sector.

The findings highlight a growing gap between expectations surrounding artificial intelligence and the financial results reported by many businesses.
Technology companies continue to invest heavily in AI development, while organisations across other industries are exploring ways to integrate the technology into their operations.

However, Slok’s analysis suggests that businesses must identify practical applications that improve productivity, customer experience or profitability before AI investments can produce substantial financial returns.

Source: TechCrunch