Technology
How Do Big Tech Giants Make Their Billions?
How Do Big Tech Giants Make Their Billions?
In 2021, the Big Five tech giants—Apple, Amazon, Google (Alphabet), Meta, and Microsoft—generated a combined $1.4 trillion in revenue.
What are the sources of this revenue, and how does it breakdown?
Below, we’ll dive into the main ways that these big tech giants generate revenue, and take a look at how much their revenues have increased in recent years.
Breaking Down Big Tech’s Revenue Streams
As we’ve mentioned in previous editions of this graphic, there are two main ways that big tech companies generate revenue:
- They either sell you a product
- Or sell you as the product to advertisers
Apple, Microsoft, and Amazon fall into the first category—like most traditional businesses, these companies offer customers a physical (or digital) product in exchange for money. More than half of Apple’s revenue comes from iPhone sales, Azure cloud services generate almost a third of Microsoft’s total, and Amazon’s online stores account for nearly 50% of the company’s revenue.
On the other hand, Meta and Alphabet do things a bit differently. Rather than selling an actual product, these two tech giants make most of their money by selling their audience’s attention. Nearly 98% of Meta’s revenue comes from Facebook ads, and 81% of Google’s revenue comes from advertising on various Google products.
However, despite their varying ways of generating sales, these companies all have one thing in common: revenues have soared in recent years.
The Pandemic Has Sped Up Growth
Amidst rising unemployment and pandemic-induced chaos, the Big Five still managed to see a significant revenue uptick.
In 2019 (pre-pandemic), big tech’s combined revenue grew by 12%. The following year, throughout the onset of the global pandemic and the various economic challenges that came with it, big tech still increased its combined revenue by 19%.
And in the 2021 fiscal year, big tech saw a 27% growth in combined revenue, year-over-year.
Company | Revenue (FY 2020) | Revenue (FY 2021) | Growth (YoY) |
---|---|---|---|
Apple | $274.5 billion | $365.8 billion | 33% |
Amazon | $386.1 billion | $469.8 billion | 22% |
Alphabet | $182.5 billion | $257.6 billion | 41% |
Microsoft | $143.1 billion | $168.1 billion | 17% |
Meta | $86.0 billion | $117.9 billion | 37% |
Combined | $1.1 trillion | $1.4 trillion | 27% |
How did these companies continue to thrive throughout economic turmoil and global chaos? It was made possible because the societal changes triggered by COVID-19 ended up driving demand for big tech’s products and services.
For example, lockdown restrictions forced people to shop online, causing e-commerce sales to escalate. Demand for laptops and cloud-based services grew as offices shut down and companies pivoted to fully remote workspaces.
Is Growth Here to Stay?
These days, COVID-19 restrictions have eased in most countries, and the world has slowly returned to normalcy.
But that doesn’t mean growth for big tech will stop. In fact, the pandemic-induced changes to our work and shopping habits will likely stick around, meaning the increased demand for big tech’s offerings could be here to stay.
Two-thirds of employees from a global survey said their company would likely make remote work a permanent option. And global e-commerce sales are expected to grow steadily over the next few years to reach $7 trillion by 2025.
Technology
Charted: The Jobs Most Impacted by AI
We visualized the results of an analysis by the World Economic Forum, which uncovered the jobs most impacted by AI.
Charted: The Jobs Most Impacted by AI
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
Large language models (LLMs) and other generative AI tools haven’t been around for very long, but they’re expected to have far-reaching impacts on the way people do their jobs. With this in mind, researchers have already begun studying the potential impacts of this transformative technology.
In this graphic, we’ve visualized the results of a World Economic Forum report, which estimated how different job departments will be exposed to AI disruption.
Data and Methodology
To identify the job departments most impacted by AI, researchers assessed over 19,000 occupational tasks (e.g. reading documents) to determine if they relied on language. If a task was deemed language-based, it was then determined how much human involvement was needed to complete that task.
With this analysis, researchers were then able to estimate how AI would impact different occupational groups.
Department | Large impact (%) | Small impact (%) | No impact (%) |
---|---|---|---|
IT | 73 | 26 | 1 |
Finance | 70 | 21 | 9 |
Customer Sales | 67 | 16 | 17 |
Operations | 65 | 18 | 17 |
HR | 57 | 41 | 2 |
Marketing | 56 | 41 | 3 |
Legal | 46 | 50 | 4 |
Supply Chain | 43 | 18 | 39 |
In our graphic, large impact refers to tasks that will be fully automated or significantly altered by AI technologies. Small impact refers to tasks that have a lesser potential for disruption.
Where AI will make the biggest impact
Jobs in information technology (IT) and finance have the highest share of tasks expected to be largely impacted by AI.
Within IT, tasks that are expected to be automated include software quality assurance and customer support. On the finance side, researchers believe that AI could be significantly useful for bookkeeping, accounting, and auditing.
Still interested in AI? Check out this graphic which ranked the most commonly used AI tools in 2023.
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