No signs of AI payoff outside the tech sector
A report from Apollo's Marc Rowan highlights that despite massive AI investment, revenue per worker and profit margins are rising only for the 'Magnificent 7' tech giants while remaining flat for the rest of the S&P 493. The analysis finds no evidence of AI boosting productivity growth outside the tech sector itself.
Why it matters This data point cuts against the narrative that AI is already transforming the broader economy, suggesting the productivity payoff many companies expected from enterprise AI adoption hasn't materialized yet. It raises questions about whether current AI capex levels are justified by near-term returns, and could fuel skepticism among investors and corporate boards weighing further AI spending commitments.
What to watch Watch for Q4 earnings calls where non-tech companies disclose AI ROI metrics, and whether this data influences enterprise AI budget decisions for 2027.