AI Investment Returns Miss Could Trigger Recession, Warns Apollo Economist

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According to Apollo Global Management, if artificial intelligence investment returns fail to materialize as expected, the consequences could extend beyond the technology sector to trigger economic recession, Chief Economist Torsten Slok said in a recent report cited by MarketWatch. The four major cloud service providers—Alphabet, Meta, Microsoft, and Amazon—collectively invested approximately $234 billion in capital expenditures in 2026, with markets expecting their combined free cash flow to grow more than fourfold from 2026 to 2030. However, Slok cautioned that with Chinese AI models gaining ground globally and token prices facing potential declines, actual cash flow growth may fall short. If returns disappoint, companies will still face planned depreciation charges on their massive capital investments, compressing profit margins. Given the weight of these tech giants in the S&P 500 index, slower-than-expected AI returns could pressure the broader market and economy.
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