Private equity giant: AI payoff strictly limited to Big Tech

What happened

Apollo Global Management, a big investment firm, made this claim in a blog post. Its chief economist, Torsten Slok, said that revenue per worker and profit margins are rising for the "Magnificent Seven" tech firms. For the other companies in the S&P 500, they are not. He also said AI is not boosting productivity (how much work gets done) for most companies.

Key numbers and facts

• The "Magnificent Seven" are the biggest tech firms. They include the hyperscalers (large cloud computing companies), plus Apple, Nvidia and Tesla.
• A PwC report found most chief executives saw neither higher revenue nor lower costs from AI.
• Apollo says token spending (the money paid to use AI models) has slowed down.
• Apollo once paid $11 billion to Intel for a 49 percent stake in a chip factory in Ireland. Intel bought that stake back for $14.2 billion earlier this year.

Some background

Companies have spent a lot of money on AI over the past few years. Many AI projects were tests called pilots. Some experts say companies now need AI projects to prove they are worth the cost, or they will be stopped. Some people online disagreed with Apollo's view. They pointed out that personal computers also took about a decade to boost productivity.

Why it matters

If AI only helps a few big companies, then the money spent on AI may not pay off for everyone else. Apollo also says the cost of building more datacenters (buildings full of computer chips that run AI) may not be worth it. This could change how businesses and investors think about AI spending.

What to watch

• Whether companies outside big tech start to see higher revenue or profits from AI.
• Whether AI token spending keeps slowing down.
• Whether companies move to cheaper or open source AI models.
• Whether reports from McKinsey and others show real earnings gains from AI.