No Signs of AI Payoff Outside the Tech Sector
Despite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech. Revenue per worker is rising for the Mag 7 but is flat for the S&P 493, see the first chart below. Profit margins are rising for the Mag 7 but are flat for the S&P 493, see the second chart below. And there are still no signs of AI boosting productivity growth, see the third chart below. With no impact on the bottom line, mainstream corporate America is pulling back and starting to view token spending not as a source of growth but as a cost center that weighs on margins.
A Reddit post also points to Fortune: Here’s the ‘core economic flaw’ in the AI bull case as stock and bond trades unravel, according to a top economist.
Dare Obasanjo @carnage4life@mas.to who also talked about "... the Productivity J-Curve."
Companies can adopt AI but until they change how they operate, they won’t financially benefit from it
(To be fair, he does also acknowledge blockchain.)
Which... I was there, Gandalf. Personal Computing productivity happened despite mandates from above. One of the things I'm constantly aware of in business systems dynamics is that Mike Harrison, who posts here sometimes as meuon, wrote HTMMS, a maintenance management system. Maintenance departments loved this. IT departments hated it. Mike and I spent a lot of time building little tools that, for instance, looked like a printer to the IT department, and imported work orders that came out of corporate into the local system. And simiar gateways scripted in Procomm to look like a terminal and feed updates back into the corporate system.
So as we look at productivity gains from "AI"... a few years ago I did talk to someone working for large company that you've definitely heard of, and corporate policy there was "no using LLMs", but he was constantly using it to develop SQL queries. Presumably because corporate wasn't giving his layer the data they actually needed. I don't know if that was good for the organization, or not.
On the other hand we find all of the studies that show that top-down imposition of these technologies are not having the desired impacts.
Don't know what to think (I mean, aside from all of the ethical issues with these companies), just throwing a few more things into the mix.
