AI is not contributing to productivity

Companies are spending millions on AI. New research suggests it's NOT paying off. And the reason might have nothing to do with the technology. A recent analysis from Apollo's Chief Economist, Torsten Slok, raises a troubling question about AI's financial payoff.

While the seven largest tech companies are seeing revenue per employee and profit margins rise, those measures have remained largely flat across the other 493 companies in the S&P 500. That's a pretty big warning sign. But here's what I think we're missing.

Companies are investing in AI models, licenses, and tools without putting nearly enough thought into what happens next. They expect productivity gains simply because employees now have access to AI. But access isn't adoption. And adoption doesn't automatically create business value.

You still need:

• A clear business problem worth solving.

• Processes redesigned around how work actually gets done.

• Employees who understand how and when to use AI.

• Leaders who can manage the changes.

• A way to measure whether any of it is working.

Otherwise, you're adding another technology expense without changing the business. And that's what worries me. We keep talking about how powerful AI is. Maybe we should be asking whether organizations are prepared to use that power. Because AI doesn't transform a business. People do.

What do you think? Are companies investing too much in AI tools and not enough in the people and processes needed to make them work?