Torsten Slok, Chief Economist at Apollo investment fund, recently issued a warning that the wave of margin growth driven by artificial intelligence (AI) outside the technology sector could take longer than market expectations. According to Slok, Wall Street's overly optimistic expectations for AI to rapidly optimize costs for all businesses are facing a complex reality.
Detailed Analysis
Apollo's analysis highlights a significant divergence in the pace of technology adoption between pure-play tech companies and the rest of the economy. While software giants can integrate and commercialize AI almost instantly, traditional businesses face complex transformation processes. Slok warned that if this process extends to five years instead of the expected five months, the stock market would have to undergo an extremely painful re-evaluation of AI-related equities.
Context and Contributing Factors
The primary causes for this delay lie in regulatory hurdles and industry-specific operational processes. In sectors subject to strict government oversight, such as healthcare, banking, and pharmaceuticals, changes to core processes cannot happen overnight. Stringent regulations concerning data security and customer privacy compel businesses to exercise maximum caution when experimenting with large language models or new automation systems.
Technical and Technological Analysis
From a technical standpoint, implementing AI into real-world operations within traditional industries demands incredibly complex internal data processing. Unlike consumer chatbot applications, AI in healthcare or finance requires absolute precision and explainability. Systems must process vast amounts of sensitive data, yet this data is often fragmented in outdated formats, creating numerous technical barriers for training and fine-tuning AI models.
Expert Opinion and Assessment
According to Torsten Slok, AI-driven margin growth outside the tech sector is currently barely visible in financial reports. Many financial experts concur that Wall Street is pricing stocks based on an overly idealistic assumption about the pace of digital transformation. Ignoring structural and legal barriers could lead to an early burst of the expectation bubble.
Implications and Future Outlook
This assessment serves as a cold shower for the global AI investment frenzy and offers a practical lesson for Vietnamese businesses. Implementing AI is not merely about acquiring software licenses but entails a comprehensive overhaul of processes and legal frameworks. In the future, businesses need to prepare for a more long-term and sustainable roadmap instead of expecting sudden financial breakthroughs in the short term.