The dominant position of large technology companies is strengthened despite regulatory pressure. Authorities in the United States and Europe have launched an offensive to put a stop to monopolistic practices that they consider illegal. Meanwhile, digital giants are growing more and more and doing so profitably, with artificial intelligence as the new goose that lays the golden eggs. The profits of Alphabet, Apple, Amazon, Microsoft and Meta skyrocketed 38% in the first quarter of the year, to 92,037 million dollars (about 85,700 million euros at the current exchange rate). Revenue increased 10.6% year-on-year, to $412,918 million.
The five large technology companies have been joined by Nvidia, which has an irregular fiscal year and will present its accounts from February to April on May 22, in which sales and profits records are also expected. These six companies have a stock market value of 13 billion dollars and have broken historical highs on the stock market that are confirmed by the progress of their businesses.
Apple corners the high-end smartphone market; Google has no rival in search or digital advertising; Amazon dominates e-commerce; Microsoft, operating systems; Meta has a privileged position in social networks with Facebook, Instagram and WhatsApp, and Nvidia is the new monopoly of high-power processors. Each one squeezes out its business and adds new ones.
All of them are using artificial intelligence, which requires large investments, to strengthen their position. Microsoft is the standout student, thanks to its alliance with OpenAI. Not only does it take advantage of its cloud computing business, but it has been incorporating layers of artificial intelligence into its products. Alphabet, which was caught on the wrong foot by generative artificial intelligence, is also growing strongly in its server business while slowly recovering lost ground.
Amazon was a pioneer in seeing data and cloud computing as a buoyant business, but it is also taking advantage of artificial intelligence in its commercial offers, inventory management and even the optimization of its routes. Meta has taken advantage of artificial intelligence to get users more hooked on their social networks and to improve their advertising management. Apple is a loose verse, which has been left behind in generative artificial intelligence, but which incorporates functionalities and applications in its products and services that draw on AI. Nvidia, of which everyone else is a customer, is the biggest beneficiary of the new technology gold rush.
Alphabet, leader by profits
The only one that has not broken records in the first quarter is Apple. The fall in iPhone sales and the decline in China have weighed on its revenues, which fell by 4%, to $90,753 million, and its profits, which fell by 2%, to $23,636 million. The company faces regulatory pressure on its app store and a lawsuit over illegal monopolistic practices in the United States in the smartphone market. The Department of Justice accuses the company of protecting the iPhone’s dominant position by putting walls in its ecosystem.
With the failure of the company led by Tim Cook, Alphabet has become the new leader in terms of profits, with 23,662 million dollars, 57% more, thanks to an income growth of 15.4% due to the improvement of the advertising and the rise of its servers. The company led by Sundar Pichai has received multimillion-dollar sanctions from the European Union and is facing two lawsuits from the Department of Justice in the United States. One, by the search engine market, has been seen for sentencing this Friday in Washington. The other, due to digital advertising, is advancing in the courts.
Amazon, for its part, leads the income, with 143,313 million dollars and a powerful growth of 12.5%. Its profits have more than tripled, reaching $10,431 million. The e-commerce business contributes the bulk of the volume of the company run by Andy Jassy, but cloud computing and the advertising business (on its commercial platform and on its television in streaming) They have become the engines of growth. The Federal Trade Commission (FTC), led by Lina Khan, scourge of technology, accuses it of exercising illegal monopolistic practices aimed at “inflating prices, degrading quality and stealing innovation from consumers and businesses.”
Microsoft’s sales and profits grew more than expected, driven by business demand for its cloud and artificial intelligence services. The income of Satya Nadella’s group rose 17%, to $61,858 million, in the first quarter of the calendar year, which is equivalent to the third of its fiscal year. Net profit was $21,939 million, an increase of 20%. In your case, after overcoming the obstacles to the purchase of Activision, what is under scrutiny by both the Department of Justice and the FTC is your alliance with OpenAI.
The only results that have been poorly received by the market have been those of Meta, but not because of the accounts themselves. The turnover of the company founded and directed by Mark Zuckerberg soared by 27% in the first quarter, to 36,455 million dollars, and the profit more than doubled, with an increase of 117%, to 12,369 million. However, after its 2023 austerity exercise, it scared the market by raising spending and investment forecasts in its commitment to artificial intelligence. Furthermore, forecasts for the second quarter also disappointed. Aside from lawsuits over the effect of its social networks on minors, the FTC sued Meta in 2021, accusing it of reducing competition with the purchase of Instagram and WhatsApp, and the process continues. The FTC wants him to go to trial this year.
For now, neither the fines, nor the lawsuits, nor the investigations, nor the regulatory changes have stopped the unstoppable growth of the technological giants, converted into the monopolies of the digital age thanks to the innovation and global success of their products and services. They all compete, yes, for the artificial intelligence cake.
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