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No Signs of AI Payoff Outside the Tech Sector

No Signs of AI Payoff Outside the Tech Sector

the-mitr

Comments (211)

  • secabeen
    The tech sector is the most software-defined and virtual of all sectors, it's natural that they are first to change. Other industries need to make capital investments to adapt to change.You can see a similar history with electrification. A few industries went quickly, but then it took like a decade of little growth before the true benefits showed up. As an example, take a factory that was built around hyrdo-power like a grain mill. You can't just take an electric motor and drop it in in place of the water wheel. It doesn't fit, the wheel is outside, there isn't room between the mill and the wall, etc. Only when you completely rebuild a new mill building designed around the features and limitations of the electric motor do you see the major benefits.Same thing here; it will be new factories and new companies that are designed from the ground up around AI and its benefits and limitations that really move the needle.
  • jstanley
    "You can see the computer age everywhere but in the productivity statistics." -- 1987
  • mbil
    This is not surprising. AI in its current form is more obviously useful at generating software than it is at assisting with other kinds of knowledge work. Software can be automatically validated. Validation loops are what let these systems iterate toward acceptable solutions. If you want AI to produce a document for humans, you need to carefully review and revise the output. In that case there's little to be gained, as reviewing plausible but subtly incorrect information sentence by sentence is in some ways harder than authoring it yourself (a quote from someone who worked in like city planning). Depending on the company/industry, some of the non-tech sector workloads still involve phone calls, parcels, faxes, etc -- things AI can't really do.Yes there are technical solutions to such problems; I'm sure there's probably a startup to make phone calls that's hooked into your company's knowledgebase, multi-LLM workflows for document review, etc. But non-tech companies aren't adopting those. Tech companies came for the software generation and stayed for the general knowledge worker productivity. Since 2023 they made the investments to procure services, change culture, and generally re-tool. Software companies are also uniquely positioned to deal with the limitations of AI in-house, like by building custom glue components to link systems, building controls to mitigate risk, etc.So basically the tech sector leverages AI more than other sectors. At a company level, non-tech has less investment, less training, less integration of AI with business processes. At an individual level this looks like workers having fewer tools, not knowing how to use the tools they do have, not knowing even what the tools' capabilities are, and incorporating them into their work only superficially if at all.Someone asked me for help using AI at their job (which is tech adjacent). They were trying to create a process document using ChatGPT. Their selected model was GPT Luna Light (!), and they were copying and pasting data between ChatGPT and SharePoint. There _was_ a SharePoint integration but it lacked write access. The model was not aligning the doc images. Their prompts were not specific. It was a bad experience. Their conclusion was that AI was stupid and not worth the trouble.So even though the non-tech sector can't take advantage of AI to the same degree that the tech sector can, they're utilizing it even less than they could be.
  • poody
    One industry example.. We have been giving students computing devices for years with the cost of educating students going up year after year.. Yet scores keep dropping.. No productivity gains here.. I do not think these results are unique to the education sector.. There are probably alot of businesses where nothing much will change except slight efficiencies.. not enough to move the needle..
  • TheAtomic
    "AI does not understand accountability, trust, culture, unwritten rules, ethical trade-offs or fairness, all of which shape reputational risk and ultimately drive revenue growth and profit margins."For a sec I thought he was talking about private equity.
  • tapoxi
    We can use a non-deterministic system because we have test suites that act as validation gates.Other industries don't, so they have no way of knowing if the AI is bullshitting them outside of manual validation, which makes it more expensive and slower than doing it yourself.
  • WillAdams
    When I tried to use CoPilot at my day job, I set up a prompt to process scans of checks and invoices (with the MICR account bar code line covered w/ a pen so that there was no PII), it would sort of work for 20 files at a time to write a .bat file command to rename the source image based on the content of the check and invoice --- this removed the need to open up scans in batches of 50, read the Invoice ID, save using that, then run a .bat file to rename them based on the balance of information in the database.The thing is, the failure rate was quite high --- often only 15 (sometimes fewer) lines were returned, and after a while, Microsoft imposed a limit on uploading more files, even though I was deleting the conversations immediately and quitting CoPilot and re-starting (long sessions seemed to have a progressively worse failure rate).Since then, access to CoPilot has been removed and we're waiting on a test program to finish. Kind of curious how many tokens this was using up (and if there's a model which could be run locally which would work well and quickly enough).
  • ttul
    I don't see why a payoff would have appeared yet. Many (but certainly not all) software companies have increased their output without hiring more people. But having software with more features doesn't necessarily drive immediate productivity gains in the rest of the economy. It will take time for those benefits to percolate. We've only had access to models good enough to majorly accelerate code writing since early-2026. I feel like we're in the very beginnings of the first part of this wave.For sake of comparison, consider e-commerce. As a proxy for "impact on the economy", we can use Amazon's revenue. They went public in 1997 and that year had revenue of $148M (just 0.14% of Walmart's revenue that year). By 2000, revenue was $2.76B (1.65% of Walmart). Bricks and mortar didn't start feeling anything until probably 2011, when Amazon crossed 11% of Walmart's revenue. And it wasn't until 2025 that Amazon finally surpassed Walmart.But, if you worked in tech in the e-commerce business, things were already feeling pretty hot by 2007. And at that point in time, the e-commerce sector was still miniscule compared to traditional retail (~4%). Software is very exciting these days and the most fantastic things are happening. They will eventually percolate out to the rest of the economy. But it will take many years before everyone notices the difference.
  • fwlr
    Well, of course not. If you borrow a trillion dollars to build a 1¢ aspirin machine to compete with $1 generic aspirin, you are strongly incentivized to sell your aspirin for 99¢. You don’t see productivity gains, because approximately all of the gain is captured as revenue for AI companies.It’s weird that this has to be spelled out for so many engineers and economists, but to be very clear: OpenAI wants your token spend to go to one-minus-epsilon of what you previously spent on payroll, and wants your productivity to go to one-plus-epsilon of what it previously was. If you want 10x productivity, spend 9.9x more on tokens. They are in the business of enclosure and rent extraction, and any innovation that comes out of their research and development - regardless of how real an innovation it is - will be completely contained and bent totally towards the purpose of their business. Any leakage of the innovation that you experience as a productivity boost is literally felt as lost profits by them.
  • jgilias
    Paradigm shifts happen when old minds retire or die. Something like that, but for companies. If you’re starting a company now, you are _definitely_ hiring less people much later, and different profiles.
  • trentnix
    No signs of AI payoff outside the tech sector...yet. I think it's partially because our harnesses are generally much, much better. And engineers seem to be more deft at figuring out where AI provides real benefit and where it needs a watchful eye.I'm seeing non-engineers use AI to send more emails, have more meetings, create more documents, and create more dashboards. So much of the busy work that happens in corporate environments was never that valuable in the first place. A firehose of busy work doesn't move any needles that matter.
  • teekert
    At a fundamental level LLMs reshape how we gather, shape, process and interact with information. Information is that which allows you to make a predictions with a probability better than chance. This will slowly change any industry where decisions are being made. So, it will touch all industries. And if we let it, all of life eventually. Better decisions, better survival.
  • jonatron
    In video production, 3D modelling, editing etc, I think a lot of jobs are disappearing, with cost dropping. Not data backed, just from what I can see.
  • Luker88
    This is not just "Outside the Tech Sector", but "outside the magnificent 7""Tech sector" is supposed to be much bigger than just 7 companies, no matter how big those 7 are.This looks to me more like just a huge centralization of wealth.
  • jeffybefffy519
    I dont even think theres a payoff in the software dev.... seems to be great to spin something up quick as a POC, then maintaining it requires people immediately who struggle with reading the amount of code it produces.
  • harry8
    The best training comes from LLM users. Loads in software to train on.Not so much in accounting, which is a much easier problem.Software devs eagerly trained their replacement.
  • zmmmmm
    I think most people in the tech sector and especially driving the AI hype have absolutely no clue how difficult it is to implement change in complex organisations. There are a bunch of technical reasons but half the reasons are not even technical - social, legal, etc. You have to shift the practices of humans and they have incredible inertia. Like decade level change response period. And during the change period they are less productive. Expect a decade type period before "productivity" impact manifests and even then it won't really be measurable directly because people will be doing different things.
  • serf
    I find it totally unsurprising and uninteresting that the tool makers themselves are the first to adopt the new tool they made.this is literally the textbook historical process across every industry ever.
  • drivebyhooting
    I think you could say the same thing of tech and the economy prior to AI.No Signs of Tech Payoff Outside the Tech Sector. Manufacturing, basic science, education, etc languished while Big Tech reaped record profits and achieved stock heights for the last 15 years.
  • anon
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  • DebtDeflation
    This is a use case issue.Right now, the most effective use case for AI is coding agents. Software development is a profit center for the tech sector, so it's not surprising that they're seeing big gains. In Corporate America, software development is part of IT which is a cost center, and the software landscape is 30+ years of bandaid-ed legacy systems, maintained by offshore contractors who submitted the lowest cost bid, so attempts to gain productivity via AI have not been as successful.Where Corporate America has seen gains from AI in my experience is with customer support chatbots, but the customer service function overall in Corporate America is an unmitigated disaster, so the gains are hard to measure.Beyond these two use cases, most people in Corporate America are just using ChatGPT to create slop and copy/pasting it wherever, and then goofing off in their newly freed spare time.We need to see new AI use cases in Operations, Finance, Marketing, etc. that can handle business processes end to end before the productivity gains start showing up in the financials.
  • iambateman
    This is like saying that the internet hasn’t created positive value for all but the biggest firms in 1998. Give it a second.
  • cuttothechase
    Article is spot on!The only issue is that the benefits would be more enmeshed with other gains in other industries.,Heck, even in Software Development, the real benefits are not with mass labor elimination resulting in cost savings but with increasing available throughput. Technology if used to the fullest potential should be able to expand the proverbial pie., which is where the gains are!That is not to say people won't try to save cost by eliminating labor due to AI., which is super shortsighted and misses the forest for the trees, but the overarching goal should be to increase the quality and quantity of deliverables, as demanded by the market.
  • anon
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  • dzonga
    'a.i' is unlike software before - where it was build then deploy with lack of customization except of a few high ticket items such as SAP, Workday etc.for 'A.I' to work for the rest of industry outside of software - you need high touch customization.
  • paxy
    “Tech sector is the first to adopt new tech” isn’t a groundbreaking revelation. I’m sure you could make similar charts for the computer, the internet and all other similar innovations.
  • Animats
    We're not seeing full automation for things that ought to be automatable now. Customer service chatbots still aren't very good. Salesforce ought to be taking over entire marketing operations, not just supporting sales but replacing it. The medical office side of insurance ought to be automatic now. The pick and place side of warehouse operations should be robotic. Shelf restocking in stores ought to be robotic. All of those things have been demoed, but didn't go to production.
  • cmiles8
    We’re heading into corporate budget season. Company after company is slashing their AI budget and the head cut wagons are circling around all the various “AI lab” teams that every company invested in two years ago with zero ROI to show for it. All while massive debt piles up to build data centers despite little evidence any of this is coming close to returning the ROI needed to justify any of it.2027 is going to be very interesting. Buckle up.
  • taormina
    And we’ve seen tech sector payoff?
  • wewewedxfgdf
    The first giant web market collapse was because no-one could work out how to make money from it or do anything more useful than put the company brochure online.
  • sehw
    Ye, it was easiest to steal all of stackoverflow and sell it back to you.
  • h317
    I doubt Excel'ification happens this fast. To make it "payoff" it needs to become the next Excel-levels of usage.
  • mbesto
    This is a pretty pathetic analysis especially for an analysis from a firm like Apollo. A few notes:1. Profit margins from the mag 7 are on an upward trend starting in 2020. This is pretty consistent with the insane topline growth had by covid and the most recent layoffs occurring over the last 6 years. To unilaterally attribute this to AI implementation is lazy.2. Most non-tech firms are only implementing AI just now because we finally have better enterprise tooling required. We won't see the effects for another 12-24 months at least.3. As a former management consultant, this might be the worst use of a stacked bar chart I've ever seen: https://www.apollo.com/content/dam/apolloaem/images/daily-sp...4. I don't know how you actually isolate AI productivity gains on a macro level. It seems pretty much impossible.This whole thing is laughable.
  • blobbers
    I would say the driving industry will get up-ended, but we'll see. It may just be workers get paid less because they only babysit the truck during very complicated times.Robots still seem far off. Its just like war, air superiority might make the war winnable but its the boots on the ground that are needed to actually take the territory.
  • davedx
    Tell that to legal firms and patent guys
  • datas
    My sector used it to make all the tools we wanted, then put it back in its box awhile ago. Just enjoying the fruits rent free.
  • keel-control
    no signs of mega tsunami damage outside of the shore - "News reporter says in the 50km radius shadow of a tsunami large enough to block out the sun"
  • JoeAltmaier
    Well, writers can use it to speed up the draft review process. Not a big financial deal, but it's a 'payoff' for the craft.
  • aelsi
    Just a thought, but I kind of think this undersells just how important technology is or eventually becomes in almost every other economic sector.
  • johanneskanybal
    It's almost as if profit isn't directly related to your jira board.I would expect new disruptors to eat the lunch of the old, but that's slow.
  • thomasjeff1
    Payoff doesn’t matter. The future potential (payoff) is what matters.
  • rglover
    You won't get magical productivity gains from a workforce heavily conditioned to following orders and a pre-packaged process (the Henry Ford model and its various bastardizations). In order to extract value from an LLM, you have to be able to think and ideate so that the inputs are of higher quality.It should be of zero surprise that the rush into AI has yielded limited results (if we're honest, both in and outside of tech)—you won't get a bunch of artists or creative thinkers out of a pliant, ironically agentic labor force. That's why most people say "it doesn't work": it's because they lack the skills and knowledge to use it properly (but corporations want to delude themselves into thinking they have a genie in a lamp).
  • trilogic
    Many will fall for the road to be paved. This is the most advanced discovery for humans to date. There is no doubt it will succeed and is here to stay. It is still new (gold rush) and deregulated. A mine field for govs and businesses. We may see to big to fail crashing (.com bubble style or worse) but no one will ever stop AI.
  • realusername
    Pretty much the same thing inside tech, I love AI for my personal projects but the productivity return in my dayjob has been slightly negative so far.
  • ethical
    lol, you are, sooooooo, blind, and iditic. Enjoy each day, then we, you are dead, vaporised, or some life shit. What a load of bollocks. Full of shit. POinltess drivel.
  • WheelsAtLarge
    It's too early. There was a time where economist could not find productivity gains from PC products. I think I remember reading about it in the early 2000s over a decade after computers were common in business. Part of it is that companies aren't quick to throw what's work for tech that hasn't fully proven itself.AI productivity gains are coming make no mistake about it. My guess is that we'll see them within the next 5 years.
  • pokstad
    > AI does not understand accountability, trust, culture, unwritten rules, ethical trade-offs or fairness, all of which shape reputational risk and ultimately drive revenue growth and profit margins.This reminds me of the book The Redemption of Time. An alien society incapable of lying has no other way to understand deception than to study an actual human mind. The different ways that we are capable of thinking can be so hard to capture in an artificial system.
  • einpoklum
    > the technology has delivered zero financial payoff to corporate America outside of tech.I wonder if the argument cannot be made that it has delivered little payoff in tech as well - in terms of actual stable revenue vis-a-vis the immense capital investments, the deep loans, the circular commitments etc.
  • haunter
    Trickle-down AI economics here we go! Suuurely it will work this time, any minute now don't worry about it.
  • j45
    Those with the payoff might not be sharing.
  • bob1029
    I think we are struggling to achieve payoff within the tech sector.There have been wins with the customer facing side of the business, but the development team seems to be the biggest problem right now despite the direct & obvious applicability of these tools. I know they aren't a special unicorn edge case because I was very rapidly solving their issues before they stopped handing me things that revealed the lethargy.Within the sector where these tools definitely work, the biggest barrier to effective adoption is figuring out a way to undermine the various ideological high grounds. I have found the most effective argument to untangle this knot to be something approximating:Challenge:"Why should I adopt or help to implement technology that might eventually replace my job?"Response:"Because refusing to won't protect your job. It puts everyone's job at risk."It doesn't matter if you protect your job (not using AI) if the entire company goes to the bottom of the ocean as a consequence. The neat thing about this is that your job is part of the set known as "The Company" and if that ceases to exist, so does your job. Good luck suing a dissolved entity for unemployment or whatever. There is enough competition in most markets to punish anyone who thinks they can win on virtue alone.
  • toomuchtodo
    Related:Only 13% of companies see real returns from AI, survey finds - https://news.ycombinator.com/item?id=50207881 - October 2026
  • trvz
    For AI to be properly integrated into businesses it would need to be enabled by people who would shortly after become irrelevant.This may well remain a "true communism/socialism has never been tried" situation.
  • AbstractH24
    There is two ways of looking at this - one is that things are overhyped.The other is that there is so much more value to be extracted before this bubble burst.Not sure which I believe, objectively. Subjectively, inside of tech, it certainly feels like the former.
  • lukasm
    “Internet may be just a passing fad as millions give up on it”
  • archagon
    Funny to see some people compare the AI rollout to the industrial revolution.The industrial revolution produced physical goods at scale, which eventually gave regular people access to things they could not have before.AI produces intellectual labor at scale. Regular people do not need mass-produced content in their lives: there's already too much music, too much TV, too much software that only seems to get worse year after year.Who needs mass-produced intellectual labor? The owning class. This is the only population segment that stands to benefit from this revolution. It's the reason every tech CEO is trying to shove AI down everyone's throats. It's the reason they're resting their feet on the table while everyone below them is starting to panic about the future of their careers.I don't believe we will see compounding acceleration of anything other than spam and enshittification in this AI-laden world. This is not technology for building futures we can barely dream of: it's a gold-plated gift to the oligarchy and a fuck-you to everyone else.
  • yieldcrv
    I've been doing workflow automations for many organizations for the last two years, and here is what I see:1. every business unit and department was neglecting a best practice due to lack of investment in their organization. it has always been that way for decades and always will be that way because it isn't economically viable for it to be any other way. the workflow automations and agents we create act as digital workers that either do that neglected part, or let the rest of the organization do that neglected part.2. the whole company always starts the year off with a bunch of goals, and by Q3 most of them are cancelled. now less of them are cancelled.both factors mean that anyone just looking at "worker productivity" or "did we save money" is going to get the answer of no. everything is costing you the same, or the AI itself is costing you more. whatever contract I'm working under is definitely going to cost you more, if you don't cancel all those enterprise SaaS seats we told you to cancel.I see a path to savings, but I don't think that's necessarily the metric to focus on. you need to look at the whole corporate structure, why are you still doing certain things, because those pressures will just make the org do more things because nobody is empowered to say "wait, maybe this is dumb"
  • zzzeek
    great. let's pop this bubble so everyone panicking can leave us devs alone with our tools. GLM 5.3 is good enough if anthropic and openai go under (which they wont).
  • ethanhood_okroh
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  • ihsw
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  • ath3nd
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  • angrymouse90
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  • IshKebab
    Yeah because vibe coding has only really worked for 3 months. Give it a chance!It'll probably be a couple of years before most companies even realise it's an option.
  • briHass
    We're a little early to be calling the game yet.The incredible improvements have only been over the last 9 months or so. Business, especially disrupting entire job functions, takes much longer than that. As is typical with this type of change, it'll be slow until a tipping point, then FOMO will hit.