Why America’s tech giants have grown bigger and stronger

WHEN your columnist first started writing Schumpeter in early 2019, he had a romantic idea of travelling the world and sending “postcards” back from faraway places that chronicled trends in business, big and small. In his first few weeks, he reported from China, where a company was using automation to make fancy white shirts; Germany, where forest-dwellers were protesting against a coal mine; and Japan, where a female activist was making a ninja-like assault on corporate governance. All fun, but small-bore stuff. Readers, his editors advised him, turn to this column not for its generous travel budget but for its take on the main business stories of the day. So he pivoted, adopting what he called the Linda Evangelista approach. From then on, he declared, he would not get out of bed for companies worth less than US$100 billion.

This is his final column and, as he looks back, that benchmark seems quaint. At the time, the dominant tech giants were already well above it. Microsoft was America’s biggest company, worth US$780 billion, closely followed by its big-tech rivals: Apple, Amazon, Alphabet and Meta. Their total value back then was US$3.4 trillion. Today the iPhone-maker alone exceeds that.

Since early 2019 the combined worth of the tech giants has more than tripled, to US$11.8 trillion. Add in Nvidia, the only other American firm valued in the trillions, thanks to its pivotal role in generative artificial intelligence (AI), and they fetch more than one and a half times the value of America’s next 25 firms put together. That includes big oil (ExxonMobil and Chevron), big pharma (Eli Lilly and Johnson & Johnson), big finance (Berkshire Hathaway and JPMorgan Chase) and big retail (Walmart). In other words, while the tech illuminati have grown bigger and more powerful, the rest lag ever further behind.