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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

Stalemate over filibuster freezes Congress

Illustration: Sarah Grillo/Axios

Senate Majority Leader Chuck Schumer and Mitch McConnell's inability to quickly strike a deal on a power-sharing agreement in the new 50-50 Congress is slowing down everything from the confirmation of President Biden's nominees to Donald Trump's impeachment trial.

Why it matters: Whatever final stance Schumer takes on the stalemate, which largely comes down to Democrats wanting to use the legislative filibuster as leverage over Republicans, will be a signal of the level of hardball we should expect Democrats to play with Republicans in the new Senate.

Dave Lawler, author of World
1 hour ago - World

Biden opts for five-year extension of New START nuclear treaty with Russia

Putin at a military parade. Photo: Valya Egorshin/NurPhoto via Getty

President Biden will seek a five-year extension of the New START nuclear arms control pact with Russia before it expires on Feb. 5, senior officials told the Washington Post.

Why it matters: The 2010 treaty is the last remaining constraint on the arsenals of the world's two nuclear superpowers, limiting the number of deployed nuclear warheads and the bombers, missiles and submarines which can deliver them.

Updated 2 hours ago - Technology

Facebook refers Trump ban to independent Oversight Board for review

Photo: Alex Edelman/AFP via Getty Images

Facebook's independent Oversight Board has accepted a referral from the platform to review its decision to indefinitely suspend former President Trump.

Why it matters: While Trump critics largely praised the company's decision to remove the then-president's account for potential incitement of violence, many world leaders and free speech advocates pushed back on the decision, arguing it sets a dangerous precedent for free speech moving forward.