What if AI Doesn't Work? Apollo's Torsten Slok Sees "No Signs" of AI Productivity Growth

 Ever since the debut of ChatGPT in November 2022, artificial intelligence (AI) has been widely hyped as a transformative technology. A new era of AI-powered business tools is expected to deliver significant gains in productivity, efficiency, and profits.

All that is good news for investors. But what if it doesn't work?

On Saturday, Apollo economist Torsten Slok made waves with a rather bearish analysis of AI's future. Slok's research found that despite hundreds of billions of dollars invested in AI data centers to develop leading-edge AI models, "there are still no signs of AI boosting productivity growth."

If that happens, it could be bad news for the stock market. Let's look at what Apollo's new AI research might mean for your portfolio.

Apollo research: No signs of AI boosting productivity or profits (beyond tech sector)

Apollo's research found that the AI era seems to be driving a larger gap between the "Magnificent Seven" tech companies and the other 493 companies in the S&P 500 (^GSPC-0.32%). Since the third quarter of 2022, when ChatGPT launched the AI boom, the Magnificent Seven have seen higher profit margins and higher revenue per worker.

But the other members of the index have not. These constituents, as a group, have seen comparatively flat productivity and profitability.

Slok's research also found that most AI spending is concentrated among a small number of companies that sell AI-related services, such as cloud computing. The companies that "sell AI" seem to be profiting from it so far -- but what about the rest of the companies that investors hope will want to keep using (and paying for) AI?

What if corporate America doesn't want to keep buying what the AI industry is selling? In his research, Slok warned that "...mainstream corporate America does not need the latest model and is unwilling to pay for it."

Apollo's AI research is worth watching, but it's not the final verdict on what happens next with the economy. Other sources have suggested that some S&P 500 companies are already seeing meaningful gains from new AI tools and automated business processes.

https://www.fool.com/investing/2026/10/29/what-if-ai-doesnt-work-apollos-torsten-slok-sees-n/