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For decades, corporate America has spurned big-lab research-and-development spending, the type that delivered the dizzying and broad tech and economic progress of the last century. But a belief that artificial intelligence is going to drive the next big economic wave has led today's largest companies — like Google, IBM and Microsoft — to revert to the old, ambitious R&D model. And their Chinese competitors — Baidu and Alibaba — aren't far behind.

These five companies — plus Amazon, Facebook and Google — combined are investing more in research and development than many entire economies. In 2015, for instance, the entire U.K. economy — companies and the government — invested $53.8 billion in R&D, less than the $58.2 billion posted by the big eight. Take a look at the chart below.

Expand chart
Data: OECD, Company disclosures; Chart: Andrew Witherspoon / Axios

Why it matters: In an economy in which corporate R&D spending has been conspicuously absent, these companies are investing big on the future. This dynamic underscores the growing advantage that a company like Amazon has over incumbent rivals: Investors bid up Amazon stock to sky-high multiples, lowering its cost of capital and enabling more robust investment and low prices.

A level deeper — more economic inequality: That these companies are investing in the long term is great for the U.S. and Chinese economies. It helps to power economic growth and makes workers more productive. But, at least in the U.S, it's also a sign of growing economic inequality, which underpins income inequality among workers, one reason for the election of President Donald Trump.

One more level down: The outsized spend is also buttressing these companies' market heft and risks a pushback to their monopoly power.

Go deeper

1 dead as severe storms pummel the South

A tree that fell on a home carport damaged a vehicle during a storm in Central, Louisiana. No injuries were reported, according to Central Fire Department. Photo: Central Fire Department/Twitter

Strong storms lashed the South early Saturday, spawning at least one tornado and unleashing strong winds and hail. And forecasters more severe weather was expected to hit the parts of the region in the coming hours.

Details: Thousands of customers lost power during the storms in Florida, Mississippi, Arkansas, Texas and Louisiana, according to tracking site poweroutage.us. An F3 tornado that hit St Landry Parish, Louisiana, killed one person and wounded seven others.

Scoop: Biden eyes Russia adviser criticized as soft on Kremlin

Photo: Alexander Shcherbak\TASS via Getty Images

President Biden is considering appointing Matthew Rojansky, head of the Wilson Center's Kennan Institute, as Russia director on the National Security Council, according to a source familiar with the situation.

Why it matters: Rojansky has been praised for his scholarship on Russia and is frequently cited in U.S. media for his expert commentary. But his work has drawn criticism — including in a 2018 open letter from Ukrainian alumni of Kennan that blasted the think tank he runs as an "unwitting tool of Russia’s political interference."

Updated 3 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: Coronavirus cases hold steady at 65,000 per day — CDC declares racism "a serious public health threat" — WHO official: Brazil is dealing with "raging inferno" of a COVID outbreak.
  2. Vaccines: America may be close to hitting a vaccine wall — Pfizer asks FDA to expand COVID vaccine authorization to adolescents — CDC says Johnson & Johnson vaccine supply will drop 80% next week.
  3. Economy: Treasury says over 156 million stimulus payments sent out since March — More government spending expected as IMF projects 6% global GDP growth.
  4. Politics: Supreme Court ends California's coronavirus restrictions on home religious meetings.
  5. World: Iran tightens COVID restrictions amid fourth wave of pandemic.
  6. Variant tracker: Where different strains are spreading.