Tech giants spend $80 billion in 2017 to keep competitive edge

A new Bloomberg article highlights that US tech giants are now one of the United States' biggest spenders on capital goods. Last year, Alphabet, Apple, Amazon, Microsoft and Facebook spent a combined total of $80 billion on expensive physical assets, including manufacturing equipment, specialized assembly tools, and undersea Internet cables. Impressive figure, it's up from $40 billion in 2015.

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.