Apollo's Torsten Slok Warns AI Gains Are Concentrated in Mag 7 as S&P 493 Sees ‘No Signs’ of Productivity Boost: 'Zero Financial Payoff'

Key takeaways

• AI’s financial upside is largely confined to the tech giants, with little evidence of productivity gains in the rest of the S&P 500.
• Revenue per employee: Mag 7 rose from $550,000 (2022) to $800,000 (2023)
• Revenue per employee: S&P 493 remained at $550,000
• Tech profit margins widened post‑2022

What happened

Apollo Global Management’s chief economist, Torsten Slok, released an analysis showing that artificial intelligence’s financial benefits are largely confined to the Magnificent Seven tech giants, with little evidence of productivity gains in the remaining 493 S&P 500 companies. He noted that revenue per employee for the Mag 7 rose from about $550,000 in 2022 to nearly $800,000, while the rest of the index stayed near $550,000. Profit margins widened for tech firms but stayed around 10% for…

Why it matters

The finding suggests that the broader market may not benefit from AI-driven productivity as much as investors have hoped, potentially limiting upside for non‑tech stocks. It also highlights a concentration of AI gains in a few large firms, raising concerns about uneven economic impact and possible crowding out of…

Short-term and longer-term

Short-term. Over the next few days, watch for any earnings releases from non‑tech S&P 500 companies that might hint at AI adoption costs or revenue impacts.

Longer-term. Over the coming months, investors should reassess the weight of AI exposure in their portfolios, especially if non‑tech stocks continue to lag in productivity gains.