Torsten Slok, the chief economist at Apollo Global Management, said that a significant slowdown in AI payoffs could tip the economy into a recession [1].
This warning highlights the growing dependency of global markets on the promise of artificial intelligence to drive growth. If the anticipated productivity gains fail to materialize quickly, the resulting gap in corporate earnings could destabilize the broader economy [3].
Slok discussed these risks during an appearance on CNBC's Fast Money program [1]. He said that the current economic trajectory relies heavily on the assumption that AI will provide a rapid boost to efficiency and output [2].
A failure to realize these gains could lead to a reduction in corporate earnings, which often serves as a leading indicator for economic health [3]. According to Slok, such a trend would not only affect the tech sector but could create systemic risks across various markets [2].
The economist said that the risk stems from the potential for a productivity slump if the massive investments currently flowing into AI do not produce the expected financial returns [3]. Such a scenario would likely diminish investor confidence and slow overall economic growth [1].
While AI has seen rapid adoption, the transition from implementation to measurable profit remains a critical pivot point for the U.S. economy [2]. Slok said that the timing and scale of these payoffs are now central to avoiding a downturn [1].
“a significant slowdown in AI payoff could tip the economy into a recession”
The warning suggests that the 'AI bubble' risk is not just about stock valuations, but about fundamental economic productivity. If AI fails to deliver tangible efficiency gains for non-tech corporations, the economy may face a contraction as the high costs of AI infrastructure fail to be offset by new revenue streams.
