Many companies outside the technology industry are starting to reconsider how much they spend on artificial intelligence, as the technology has yet to deliver clear financial returns for them.
Instead of seeing AI as a source of growth, a growing number of businesses now view it as an extra cost that weighs on their profit margins.
This is according to a new analysis by Apollo Global Management chief economist Torsten Slok, published on October 24.
Why Companies Are Pulling Back
Slok said mainstream corporate America is pulling back on AI because the technology has had no visible impact on its bottom line.
Companies are increasingly treating token spending, the money paid to use AI models, as a cost center rather than an investment that drives growth.
He also noted that most businesses outside the tech sector do not need the latest and most advanced AI models, and they are unwilling to pay premium prices for them.
In contrast, startups backed by venture capital continue to spend more and more on AI services.
Data from fintech company Ramp, cited in the analysis, shows that AI spending is heavily concentrated. The top 10% of firms account for 95.6% of spending on OpenAI and Anthropic, and 99.5% of spending on model serving and inference.
Slok said that as long as AI use and spending stay confined to a small part of the economy, the broader economic effects of AI will remain very limited.
This comes as some of the biggest tech firms continue to pour money into the technology. Earlier this year, Meta’s AI spending wiped out 91% of its free cash flow.
AI Cannot Replace Human Judgment
Slok also questioned whether cheaper and more capable AI models will automatically help businesses earn more.
He described AI as a great calculator but said that, in business, intelligence is mostly about judgment. That judgment depends on context, and the answer can vary depending on which person or which model is asked.
According to Slok, AI does not understand accountability, trust, workplace culture, unwritten rules, ethical trade-offs, or fairness.
These factors shape a company’s reputation and, in the end, its revenue growth and profit margins. As a result, turning increasingly cheap AI into higher revenue and profits may be harder than it sounds.
Previous Research Raised Similar Concerns
The findings echo earlier research that questioned whether the rush to adopt AI is paying off.
In 2025, a report from MIT’s NANDA initiative found that about 95% of generative AI pilot projects at companies were delivering no measurable impact on profits.
Other studies have also raised doubts about whether widespread AI adoption is improving productivity at work, even as companies keep investing in AI tools and automation.
No Extra Profit Outside Big Tech
Apollo’s analysis is based on the S&P 500, split into two groups. The first is the Magnificent Seven: Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. The second is the remaining 493 companies in the index.
Revenue per worker and profit margins are rising for the Magnificent Seven. For the other 493 companies, both measures have stayed flat.
Slok also said there are still no signs of AI boosting productivity growth across the economy.
We reported earlier that companies are spending billions on AI without making any extra money from it.
According to Slok, the AI story will be decided by the S&P 493, not the Magnificent Seven. So far, he said, there is no evidence that revenue growth or profit margins are improving outside the tech sector.
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