Global Transition to a Digital Future: Investments That Change the World

Leading companies are investing billions in digital infrastructure, setting the stage for a future where technology will shape every aspect of life.

Record Tech Spending Among Largest US Companies

The top five US tech companies — Microsoft, Google, Amazon, Meta, and Apple — spent a huge amount of money on developing their infrastructure and technology in the second quarter of 2024. This amount was a record $55 billion. For comparison, a year ago they spent $35.6 billion, and five years ago — $19.4 billion. If you look at the spending 20 years ago, it was almost 100 times less — only $0.6 billion.

The bulk of this money goes toward building and developing data centers—huge rooms filled with servers that store and process data for users around the world. These centers are needed so that we can use cloud technologies—for example, to store photos online, use online services, or run applications without having to download them to our computers.

How does this compare to other industries?

To better understand how large this amount is, we can compare it to the spending of other major industries in the United States:

• All the country's oil and gas companies (such as Exxon Mobil and Chevron) spend about $26-29 billion per quarter on developing their businesses.
• Large metal and wood processing companies spend only 5-6 billion dollars over the same period.
• Electric power and utility companies spend about 40-42 billion dollars on their development.

That means these four tech companies spend almost twice as much as all U.S. oil and gas companies combined, and much more than steel companies.

Why do they spend so much?

About 90% of all this money goes to the development of cloud technologies. Clouds are a place on the Internet where data is stored and processed, and companies provide access to it to other companies and users. Since 2017, such technologies have become very popular, and since 2023, the main direction of development has been GAI (Generative Artificial Intelligence) – a special form of AI that creates new content, such as texts, images and music.

However, despite such huge expenses, there is no clear understanding yet of how these expenses will pay off in the future. Companies continue to invest in these technologies, hoping that they will bring profit in the future.

In conclusion, it can be said that the whole world is rapidly moving towards digitalization. Digital technologies are becoming the basis of all spheres of life, and this is noticeable in how the largest companies invest huge amounts of money in the development of infrastructure.

Author's opinion: I will draw an analogy with the construction of the first railroads in America. At the very beginning of the development of this industry, the volume of investment for those times was staggering. But the infrastructure was built in the 19th century, and it still brings in income today. Yes, it requires repair and maintenance, but it is a stable financial flow, which only grows over time due to its implementation in everyday life.

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