Tech Firms Are Suddenly the Corporate World’s Biggest Investors
Apple’s new headquarters has created 13,000 new construction jobs
A common way to describe the history of the technology industry is by product cycles. The 1990s was the era of the PC; then came the internet and related services, followed by mobile; and now artificial intelligence looms. But there is a different way to think about tech: it is switching from an era of hoarding profits to one of reinvestment. Take a crude yardstick of spending: the physical footprint of the five most valuable American tech firms. A decade ago if you added up all the land they occupied, you got to an area one and a half times the size of Central Park. Now an ongoing splurge means they use ten times more space, or 600m square feet (55m square metres), roughly the size of all of Manhattan. This shift to redeploying profits is seismic.
Amazon accounts for two-fifths of that space — the equivalent to anything south of Grand Central. Way back in 1998, its boss, Jeff Bezos, had a different message, telling his shareholders that its business model was “cash-favoured and capital efficient”. The capital-light approach was in vogue in China, too, until recently. At the end of last year Alibaba’s market value was similar to the total for China’s biggest 700 industrial firms, yet it had 12% of their…
