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Tech Giants Spend $80 Billion To Make Sure No One Else Can Compete (bloomberg.com)
An anonymous reader quotes a report from Bloomberg: Google parent Alphabet and the other four dominant U.S. technology companies -- Apple, Amazon, Microsoft, and Facebook -- are fast becoming industrial giants. They spent a combined $80 billion in the last year on big-ticket physical assets, including manufacturing equipment and specialized tools for assembling iPhones and the powerful computers and undersea internet cables Facebook needs to fire up Instagram videos in a flash. Thanks to this surge in spending -- up from $40 billion in 2015 -- they've joined the ranks of automakers, telephone companies, and oil drillers as the country's biggest spenders on capital goods, items including factories, heavy equipment, and real estate that are considered long-term investments. Their combined outlay is about 10 times what GM spends annually on its plants, vehicle-assembly robots, and other materials. The splurge by tech companies is behind an upswing in capital-goods spending among big U.S. companies, which is seeing its fastest growth in years, according to a Credit Suisse analysis. The $80 billion tab also is a snapshot of why it's tough to unseat the tech giants. How can a company hope to compete with Google's driverless cars when it spends $20 billion a year to ensure it has the best laser-guided sensors and computer chips? There are a lot of physical assets behind all those internet clouds.
"How can a company hope to compete with Google's driverless cars" - Easy, hire any competent driver. Google's AI will never match that in my lifetime. Any company trying to accomplish this impossible feat on a budget is business-grade retarded.
What is the point of stating that top 4 companies of a very large sector spend more combined than one company of some other sector? Why not turn it around, do top 4 auto manufactures combined spend more on long-term investments than just Google?
compared to what they're spending on Mergers & Acquisitions. That's where the real non-compete comes from. I don't remember the last big tech company that didn't just get bought out. That's the trouble with letting these companies hold onto so much cash. They don't have anything to spend it on except buying out competitors. Not since Bell Labs have they felt the need to put real money into basic research...
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Cheapskates
You have 50 states that need a system to keep the voting even among them called the electoral college, but any 3 large corporations in an industry, are called competition.
--
Four score and seven years ago - Abraham Lincoln
Considering this from TFS: " The splurge by tech companies is behind an upswing in capital-goods spending among big U.S. companies, which is seeing its fastest growth in years...", since the rest of American industry continues to outsource every damn thing, this is one bright spot.
Sounds like these “monopolies” are really making things better for the consumer.
I believe that was the supposed to be the whole point behind judging if a company was having a negative effect on the economy,
New industries often follow this pattern. Railroads, oil, and steel did the same in the 1800's. While they did expand and grow their industries, eventually they played the usual tricks oligopolies/monopolies play to keep out competition. When competition was killed off, they jacked up prices, forced bundling (buy X to get Y), and slacked on service. And we had similar with AT&T, IBM, and Microsoft.
When and how to break them up or regulate them more is politically sticky. Libertarians have suggested they end up falling on their own faces after a while, often due to complacency, such that gov't intervention is not necessary. However, it can be many decades before they finally trip, meaning consumers are stuck with lack of competition and choice for decades.
Some also argue that if we don't let them grow, then the Chinese gov't will prop up and help create similar conglomerates outside the control of democracies.
Table-ized A.I.
Seriously. Yes we all hate him, but you can't ignore his incentives to spend capitol.
Capital expenditures aren't an evil conspiracy to keep everyone else down, it's literally how companies function and produce consumer goods. What's next, an expose on banks charging interest to loan money?
All you have to do is look at the top 10 companies in the NASDAQ going back a few decades to realize that tech is fickle. Today's winners are tomorrows losers. Buying a lot of capital goods doesn't magically ward off competition or immunize you to changes in the business environment.
Who says they are doing this on a budget? Google has deep R&D pockets.
I can see it gradually expanding: limit it to carefully mapped roads at first, and gradually expand the driving network. The trucking industry is salivating over this because drivers are a big cost of theirs.
Table-ized A.I.
Nobody thought they could fall. They were too big, too powerful, too important.
Someone came along with a business model that pulled the rug out from under them.
It's only a matter of time.
By not spending anything close to $20 billion a year to ensure it has the best laser-guided sensors and computer chips and sell it to Google's competitors? Yes, there's obvious barriers to entry that prevent a lot of direct competition against tech (or any other industry) company giants. But a lot of the spending is on stuff that obviously is expensive because they're trying out a lot of possibilities instead of choosing one "good idea" and sticking with it. It's not inherently about "mak[ing] sure no one else can compete". It is about leveraging your capital to try to state relevant vs the risk of some upstart with virtually no money eating your lunch.
tl;dr - R&D is how companies stay relevant.
"Tech Giants Spend $80 Billion To Make Sure No One Else Can Compete" says other companies spending less would be "on a budget" by comparison, duh.
I can gradually see you understanding the point I made, that the AI is not good enough for real-world applications and may not be within my lifetime.
But for right now you seem to be completely oblivious despite your own salivation.
The trucking companies are also having trouble keeping truckers in the seats. Automate away most of the long-haul tasks and use drivers for last-mile delivery, and the problem is solved.
Bury Trump under the prison, that traitor has done nothing for anyone except Vlad Putin. Also you can't spend "capitol" you spend "capital" there you "genius"...
Except it isn't, literally, because nobody has solved the problem yet. AI is not good enough, it's not getting close. It's the same it was a few years ago, ready to fail negligently or maliciously or both. Drivers are much, much more reliable.
This will be true for the foreseeable future. AI is not a solved problem in any real way. People trying to rush it to market are the usual morons, and early adopters will get wiped out and have nothing to show for it.
When it's finished and has demonstrated that, then you can run the marketing department or be on sales calls. Doing that right now is retarded. Follow the hype machine right off the cliff if you need to, I sure don't.
Paying drivers a living wage would solve their shortage problems obviously. No tears for companies who don't pay their labor properly and expect miracle AI solutions within a few years, fuck them all.
Bury Trump under the prison,
*
Go drink some drain cleaner, you worthless shit stain.
When you can now outsource the driving to Mexico.
The AI does not need to be perfect. Not nearly. We already have tech to remotely control trucks. So the AI just needs to do the easy bit, keep them in a lane, stop if things go wrong and they lose contact with their remote driver.
One remote driver in Mexico can then easily monitor several trucks driving down the interstate.
...just what spending on capital equipment has to do with "making sure noone else can compete".
Have we actually reached the point of thinking buying machine tools is anti-competition? And if so, does that mean that when a small company buys machine tools, they are also "making sure no one else can compete"?
When I saw the headline, I assumed that "make sure no one else can compete" meant they'd spent the $80B in Washington buying legislation. Because it never occurred to me that buying the machinery required to make your product could be seen as anti-competitive. By anyone
"I do not agree with what you say, but I will defend to the death your right to say it"
Didn't they say the same thing about the "Big Three", and then they failed to innovate (fuel efficiency, EVs, etc) and today their market share is half if what it was back in the 60s. A little over a decade ago people were laughing at the audacity of SpaceX, trying to enter a market which previously required government sponsorship. Today they're eating the market for lunch and they haven't even got reusability up and running in earnest just yet. As long as net neutrality is preserved the barrier for entry should be pretty reasonable. It may take a new company a little time to get traction, but that is the reality of business.
Greedy bastards at the end of the day. Who knew...
Go home Donald. You're drunk.
I have an idea to remove the need to complex AI for long haul.
You build a network of rails, and put the trucks on the rails, no steering required!
You could connect a hundred of the trucks together and then you'd only need one driver for the whole lot!
You could also power the rail-trucks through a wire above them and the steel rails they ride on, no more diesel!
Although I realize the current monopoly laws wouldn't make either Apple or Google/Alphabet (or similar competitors) a monopoly, they both effectively have a single 'monopoly' of the entire market, but because the current laws would allow them to claim the other's marketshare doesn't make them a monopoly, they both get to enjoy their duopoly. We know how duopolies have totally worked out for the consumers' interest in the telecom space (/sarcasm).
I think the laws need to be changed, either better inline with the EU's (where competition is the primary thing they protect, instead of only protecting consumers from harm), or consider any duopoly the same as a single monopoly.
(No, I'm not going to work out the specifics of dealing with that - it's not my job, since I'm the one paying through my taxes for the government to do it).
AC comments get piped to
You stated that Apple and all of the various Android-using companies and / or Google don't compete, right? They each have completely separate markets and each has a monopoly, correct?
My house has an iPhone, an Android phone, an iPad, and Android tablet, MacBook Pro, a Chromebook, and a Linux computer. Which market am I? Which company am I forced to buy from?
I had no choice, there was no competition when I bought the iPhone, and no competition when I bought the Android, phone, right? Wife wants to replace her iPhone and she's thinking she'll go back to Android, but she's not sure which manufacturer yet. Is that not allowed? Or she must switch back. Please let us know because it looks like competition to us, like we're choosing.
Snapchat is from 2011. So we're looking at 7 years in what's supposed to be the fastest moving industry in human history.
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Trump is just the mouth piece for the policies of others; including Vlad.
That's so stupid. You would never get enough resources together to get such a network to cross a state, let alone the entire continent!
This is one of those stupid ideas that sound good on paper when implemented in small scale, like in New York City, but it will never work on a trans-continental scale in practice.
That's what I was thinking. It appears to be money invested in reducing costs, increasing capacity.
It may have the effect of making it difficult for younger companies to compete, but, if you are a small company trying to compete with a large company, you have already failed if you plan to offer a small cost reduction to your potential customers.
The real "Libtards" are the Libertarians!
Antitrust law in the US is basically judge-made law (Congress left it deliberately vague) and the DOJ doesn't try to do much of it, in part because big companies are savvy enough to have political clout.
"Changing the Laws" would either require congressional will (which would cost them donations) or greater enforcement (which becomes more likely as people like the President blame big companies for "censoring" the radical right.
There are plenty of great people on the right. Alex Jones is not one of them--he's the kind of guy you wouldn't want your kids near, much less want millions of people hearing from every day. Sometimes a viral message really is a viral--harmful to the whole damn system. But shutting him down lets the President play the victim card on behalf of the right, which gives the President press and makes it look like he's doing something.
There could be significant benefits to government intervention in monopolistic practices to prevent the abuse of market power. It just has NOTHING to do with the right-left dynamic, and everything to do with actual *abuses of market power.* So there is a small chance the DOJ winds up doing something intelligent here. But it is very small, and will likely result in token fines and very minor antimonopolistic compromises at best.
I remember when America Online was making it impossible for anyone else to compete. Today, Apple makes it impossible for makers of flip phones to compete. Thank the gods for that!
Google, Facebook, etc are spending billions of their own shareholder's money to give them a good return on their investment. This is exactly what they should be doing and they should be praised for their success. These corporations profit by providing services for which people clamor. They make our lives better. Hopefully, they and other mega-corporations will continue to do so long into the future.
If you want to compete you need to have a good product that people prefer over the offerings of other competitors. There is no reason to get upset over such a state of affairs.
the public rail system of several European countries (Switzerland, Germany, etc.) seem to disagree with your statement.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
I work in the auto industry. While individually, GM might show to have a smaller investment in capital equipment and research, you need to understand that there are many other big players that each contribute to the total industry such as BOSCH, Continental, tire companies, Wagner, etc. There are many of these tier one players and combined, they would probably exceed or equal the players being mentioned in the original post.
They spent billions to enter and expand markets because they wanted to screw their competition. They were thinking âoeYou know... I could make something else that costs less, but that wouldnâ(TM)t fuck the other guy enoughâ.
Holy shit... companies invest in more expensive technologies as their pockets allow them in order to have a somewhat secure market to allow them to see a return on investment before others can compete.
Just draw colored lines on the middle of the road, so that a simple camera device can make driving.
"How can a company hope to compete with Google's driverless cars when it spends $20 billion a year to ensure it has the best laser-guided sensors and computer chips?"
by developing laser-guided sensors and chips that don't cost $20 billion/year?
On a long enough timeline, the survival rate for everyone drops to zero.
They're running as fast as they can to do tasks that require centralized, warehouse-scale computers before the technology advances make my phone and laptop capable of joining a distributed cloud of machines that can do the same tasks. If they don't hurry and make a lot of money, they won't get to buy into the next big thing.
"Quick! Use the money to buy into something else amazing!"
davecb@spamcop.net
It suprises me that Google, Amazon, Microsoft, and Facebook
spent a combined $80 billion in the last year on big-ticket physical assets,
including manufacturing equipment and specialized tools for assembling iPhones
I am not sure that sits well with Apple :-)
but honestly, WHY is it nessecery to mention the iPhone in this context? Jesus christ!
Now remove the rails. And make the trucks run asynchronously, with embedded driving software. With little onboard gensets exchanging power with the transmission. That's what Gooberla and friends are doing.
But I still like your idea better and think trains are the most natural fit for autonomous driving. I don't know why lidar and computer vision are not used to augment train drivers. Figure out if that train is on a collision course, whether the track is flooded, whether a boulder is across the tracks on a foggy morning, whether a person or vehicle is on the track.
How can a company hope to compete with Google's driverless cars when it spends $20 billion a year to ensure it has the best ..
How has this happened in the past? In some cases, the big competitor becomes a dead weight bureaucracy and smaller competitors gain the advantage. Or a new technology removes the advantage. Or, for instance, where does Uber get all its money?
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
Maybe we need a set of specialized "long-haul" roads just for carrying stuff long-distance. Instead of one motorized unit pulling one or two trailers (3 trailers in the flyover states) we could use bigger motorized unit with a couple hundred trailers. We could make these long-haul roads out of specialized materials so they're more impervious to weather conditions. I wonder if that would work...
too bad the people cannot own this rail-truck-road.
If building these things prevented anyone else from building them (which in some cases it might) and they had no plans to actually make money using these things, that would be different. That would be to make sure no one else could compete. Yep, yep, sure would be. Let me read that headline again . . . .
I agree. People just think that technology can solve problems. Only poorly.
That's because the USA is retarded. Elsewhere in the world, they've interconnected a lot of states through actual rail.
China being a great example.
Patents and subsides.
Putting some cash in physical assets to beat inflation perhaps?
Who the hell do they think they are, investing all kinds of money, improving their products and lowering their prices, satisfying their customers and building brand loyalty!
The government needs to put a stop to this. It's making my socialist ideology look bad.
Why does a gold mine or an oil field, a natural resource that was there centuries before the decedents of anyone claiming ownership was on that land mass much less born, get to claim ownership? Usually because they're they most ruthless or they got lucky and held onto enough cash during one of the economy's cyclic downturns to buy up property being sold for cheap by the desperate... Funny how nobody every seems to question that.
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is you lose a ton of flexibility from having trucks deliver goods. That flexibility let's companies like Walmart stock the bare minimum of what they need at any given point in time. It means never getting stuck with over supply and having to slash prices, leading to much higher profits thanks to tight control on supply. Sure, you've got to heavily subsidize oil, but that's what the United States Armed Forces is for.
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You know, you have something there. Getting help from the Chinamen is possibly the only chance to get this infeasible idea done.
I don't know why lidar and computer vision are not used to augment train drivers. Figure out if that train is on a collision course, whether the track is flooded, whether a boulder is across the tracks on a foggy morning, whether a person or vehicle is on the track.
We do. Lookup PTC - Positive Train Control. We use lidar and computer vision along with a number of other railroad-specific technologies to determine the safety of the road 8-miles ahead of the locomotive. PTC works like a dead man's switch requiring train crew interaction every few mins, and the system will slow or emergency stop a train that doesn't have a safe path 8-miles ahead.
The government-mandated PTC project deadline is 2020 but we are currently stopping trains daily during our "RSD" revenue service demonstration phase.
Source: Am PTC project person for big train company.