Apollo’s chief economist Torsten Slok is throwing cold water on the idea that AI will quickly boost profits outside the tech sector. He says there is no evidence yet that AI is improving margins at the S&P 493 companies—essentially everyone except the ‘magnificent seven’ tech giants. The sky-high valuations of AI stocks are banking on a rapid productivity surge, but regulated industries like healthcare, banking, and manufacturing face major hurdles. Privacy laws, compliance requirements, and slow-moving process overhauls could delay gains by years, not months. Even when individual workers are more productive, these improvements are often invisible in knowledge work, so they don’t show up on the balance sheet. If the big productivity payoff takes five years instead of five months, a painful stock correction could be coming. Plus, falling token costs could squeeze revenue for hyperscalers. Why it matters: This reality check underscores a critical gap in the AI hype cycle—investors are pricing in a transformation that the messy, regulated real world may not deliver on schedule, potentially resetting valuations across the AI ecosystem.