During the quarter ending in March, the U.S. tech “superpowers”—Alphabet, Amazon, Microsoft and Facebook, spent $16 billion on capital projects, a figure 68 percent higher than their combined capital spending during the same quarter a year ago, a rate of growth that outpaces that of revenue. This according to a recent Bloomberg article.
“In one sense,” the article says, “the booming spending on big-ticket projects defies economic logic. In principle, once companies achieve gigantic scale, it should become cheaper for them to operate their businesses rather than more expensive. But that’s not necessarily how technology works.” It explains that the tech behemoths’ desire to capture more market share, they need to up spending. While this sort of activity can make investors jittery, says Bloomberg, “for the most part they’re happy to see the capital spending tabs go up if it means tech giants are investing in the future.”