Revenue per worker is climbing at the seven biggest tech companies and going nowhere at the other 493 members of the S&P 500. Torsten Slok, chief economist at Apollo Global Management, put that gap at the center of a note posted Saturday, and his read on it was blunt: “the technology has delivered zero financial payoff to corporate America outside of tech.”
Profit margins show the same split in his charts, rising for the so-called Mag 7 and flat for everyone else. A third chart, built on the San Francisco Fed’s utilization-adjusted productivity series, shows no sign yet of AI lifting productivity growth. The note lands days before Microsoft reports Wednesday, with Alphabet’s call that same afternoon and Amazon’s on Thursday. Bloomberg, which picked up the note Sunday, also ran an earnings preview that expects healthy growth from those three companies while warning that AI spending fears threaten to swamp the results.
Tokens keep getting cheaper
Slok’s argument turns on who is buying. Venture-backed companies keep spending more on tokens, he wrote, while mainstream businesses don’t need the newest models and won’t pay for them. With nothing showing up on the bottom line, he said, many of those companies are pulling back and starting to see token spending as a cost center that weighs on margins.
Ramp’s AI Index, which feeds two of his charts, shows adoption still growing, with 55.9% of U.S. businesses on Ramp paying for AI in September, up 12.1 points from a year earlier. The spending is lopsided, though. Among firms on the corporate card platform that pay for AI, the median spent $15.70 per employee in September, while the top 1% spent a median of $9,567.53. Token prices are also falling. The blended price per million tokens across OpenAI and Anthropic dropped 25.4% to $0.64 in the week ending Oct. 11, compared with the same week a month earlier.
Slok’s open question is whether companies can turn “increasingly cheap intelligence” into faster revenue growth and fatter margins. That “may be harder than it sounds,” he wrote, since in business, intelligence is mostly judgment, and judgment depends on context.
Some buyers are still hiring around it
Slok has been making this case since at least a June 30 note that named health care, banking, manufacturing and legal among the slow movers. Executives report wins but struggle to measure them. Half of UK chief executives in EY-Parthenon’s CEO Outlook ranked AI tools among their top three productivity drivers, yet only 14% had full real-time visibility of AI costs, WebProNews reported.
JPMorgan Chase, one of the 493, plans to add staff alongside its AI tools. Its EMEA private bank uses AI for onboarding and research and expects adviser headcount there to grow 10% to 15% over three to five years, its regional chief told Bloomberg.
His conclusion was that “the AI story will be decided in the S&P 493, not the Mag 7.”
from WebProNews https://ift.tt/Rti2wkb
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