It is becoming increasingly common for regulators, politicians, and activists of both parties to take shots at America’s largest and most successful technology companies (“Big Tech”), charging them with having undue market power and facing little or no competition. The characterizing terms kings, oligarchs, monopolists, and others are cavalierly thrown around.
The reality is far different.
At the end of each fiscal year, public companies must file a 10-K annual report with the U.S. Securities and Exchange Commission, providing a comprehensive overview of their business and financial condition. This is an essential, no-nonsense document for investors and those considering investing in a company. It must also meet the highest legal standards for accuracy.
The fiscal year 2024 10-Ks for Amazon, Alphabet (Google), and Meta (Facebook) each discuss in detail the numerous, formidable competition threats these companies face.
Amazon says in its 10-K, “The worldwide marketplace in which we compete is evolving rapidly and intensely competitive, and we face a broad array of competitors from many different industry sectors around the world.” Amazon then goes on to list more than three dozen sectors where it faces competition, with each sector having multiple competitors.
Like other Big Tech companies, Amazon’s success depends on how well it attracts qualified people. “Competition for qualified personnel is intense, particularly for software engineers, computer scientists, and other technical staff, and constrained labor markets have increased competition for personnel across other parts of our business,” says Amazon’s 10-K.
Alphabet, the parent company of Google, is in a similar situation.
“Our business is characterized by rapid change as well as new and disruptive technologies. We face formidable competition in every aspect of our business,” it says. The 10-K then provides a similarly lengthy list of competitors to Amazon, with whom it also competes in certain areas.
Meta, which operates Facebook, says, “We face significant competition in every aspect of our business, including, but not limited to, companies that facilitate the ability of users to create, share, communicate, and discover content and information online or enable marketers to reach their existing or prospective audiences.” It adds, “Further, we face significant competition from other companies that are developing their own AI features and technologies.
Another sign of the intense competition is the vast sums each company allocates to capital investments, primarily via transformative AI. Amazon has announced it plans $100 billion in fiscal year 2025 capital investments, Alphabet $75 billion, and Meta $60-$65 billion.
Such massive investments reflect a strong competitive landscape and a willingness to take risks because success will not be maintained by sitting still. Indeed, the race for improvements in AI is a global competition, and the companies’ competitors are far more than U.S. companies.
All of this is good for America. Competition is already thriving and will thrive more from the hundreds of billions of dollars in capital investments in 2025 alone. Politicians and regulators should take this to heart, back off unfair criticisms, and seek at least some understanding of how these investments will benefit America in 2025 and beyond.
