The AI payoff is real. The timeline is the problem

Big Tech and Wall Street fueled the artificial intelligence boom in recent years, believing that building the necessary infrastructure would soon be rewarded by a surge in corporate productivity. However, two esteemed economists from firms financing the buildout have now questioned this premise, publishing warnings that AI spending is outpacing its economic payoff.

While acknowledging AI's future potential, Goldman Sachs' chief economist Jan Hatzius estimates that the growth boost from the AI buildout will peak in late 2026 or early 2027. Similarly, Apollo chief economist Torsten Slok notes that while profit margins and revenue per worker are increasing among the Magnificent Seven, they remain stagnant across the remaining 493 companies in the S&P 500.

Mainstream companies are now viewing AI spending as a cost center rather than a growth driver. Despite the warnings, executives at the top of firms remain optimistic, viewing AI as an urgent race against time and competitors. They expect AI to fundamentally reshape how work is done, unlock major productivity gains, and ultimately lift both revenue and earnings.