AI Boom Fails S&P 493 as Analysts Warn Momentum is Slowing
Financial markets have unobtrusively coined a gauge representing every company left behind during the AI rally.
Torsten Slok, Chief Economist at Apollo Global Management, terms this group the S&P 493 (reflecting the broader benchmark absent the Magnificent Seven), having calculated precisely what these businesses gained following twenty-four months of hefty capital allocation towards generative software.
“The technology has delivered zero financial payoff to corporate America outside of tech,” Torsten wrote in a note on Saturday.
Goldman Sachs Chief Economist Jan Hatzius advised investors over that very period that AI will deliver its apex contribution towards American macroeconomic expansion by late 2026 or early 2027.
- US$1.76tn: The record volume reached by domestic US primary investment-grade corporate debt issuance during this annual period
- US$300bn: The amount of corporate borrowing directly linked to artificial intelligence infrastructure financing
- 100 basis points: The increase in benchmark borrowing yields (long-term interest rates), which Goldman Sachs estimates could reduce US GDP by 0.6% if sustained
- 0.4 percentage points: The contribution that the wealth effect from AI stock gains added to US household consumption growth over the previous 12 months
- US$100bn: The potential drop in South Korean semiconductor exports projected by South Korea's central bank if US tech capital expenditure decelerates
Measuring the Widening Equity Divide
Torsten presents a stark assessment.
Real employee sales generation surges across the tech titans whilst stagnating throughout the remaining index constituent members; official efficiency metrics reveal zero tangible expansion; and traditional enterprises now categorise computing charges as an operational liability rather than an engine for top-line revenue, determining upgraded frontier models are unnecessary luxuries they refuse to fund.
His sharpest observation notes that “AI may be a great calculator, but in business, intelligence is mostly judgment.”
The technology has delivered zero financial payoff to corporate America outside of tech."
Investment Bank Forecasts Approaching Peak
Aggregate expenditure continues expanding, yet its marginal economic impetus crests shortly, tax allowances from prior legislation are waning and benchmark borrowing yields have climbed roughly 100 basis points – an increase he partially attributes to tech infrastructure leverage which could trim 0.6% from national output should it linger.
Misjudging these dynamics carries immense peril. Goldman calculates that equity appreciation from machine-learning shares contributed 0.4 percentage points to household consumption increases across the previous twelve months.
Furthermore, an immediate cessation of hyperscaler construction projects would leave domestic gross output nearly two percentage points smaller.
Nonetheless, Goldman maintains the fundamental premise that efficiencies ultimately materialise across business operations, carrying a caveat Jan states plainly.
The conduit involves employment reorganisation, with AI-adopting enterprises across the United States already demonstrating distinctly softer headcount additions.
Impending Reckoning for Tech Giants
Alphabet and Microsoft disclose financial performance on 28 October ahead of Amazon’s print twenty-four hours later, leaving market observers focusing strictly on identical figures: infrastructure projections and pathway visibility toward justifying that US$300bn threshold.
Meanwhile, credit markets remain in overdrive.
Primary corporate debt volume domestically reached an all-time summit of US$1.76tn during this annual period, AI financing exceeds US$300bn and as Lindsay Rosner of Goldman Sachs Asset Management says, the industry is witnessing "one of the most capital-intensive corporate cycles in decades".
South Korea’s monetary authority has likewise quantified the potential contraction, cautioning that an American infrastructure deceleration might reduce domestic semiconductor overseas shipments by US$100bn.
Key voices in the AI boom:
Apollo Global Management: Apollo monitors returns, warning that heavy corporate spending yields zero financial payoff for the broader S&P 493 beyond Big Tech.
CEO: Marc Rowan | HQ: New York City, New York, US
Goldman Sachs: Goldman Sachs finances AI expansion and forecasts that the technology’s boost to United States economic growth peaks around late 2026.
CEO: David Solomon | HQ: New York City, New York, US
Bank of Korea: South Korea’s central bank models downside exposure, cautioning that slowing American tech spending could slash national semiconductor exports by $100bn.
CEO: Rhee Chang-yong (Governor) | HQ: Seoul, South Korea
