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The Big Tech War for AI

2023 looks like a very important year for US Big Tech. After the difficulties faced in the last twelve months, which have led to massive layoffs in some cases, Apple, Microsoft, Google, Amazon and Meta are in the spotlight. Data for the last quarter of 2022 and early 2023 were released in early February, and the results are mixed.


Apple reported lower-than-expected data for the first time in three-and-a-half years. Revenue for the November 2022-January 2023 period fell 5.5% and earnings decreased 13.4%. The COVID pandemic and the lockdown at Foxconn's plant in China impacted sales of the iPhone 14, which plummeted by 8%.

The future of Apple's projects, such as the Apple Glasses, is uncertain. There is talk of a pause in the development of the augmented reality glasses due to technical difficulties and a delayed launch date.

Apple's next big launch is the much-anticipated mixed reality headset, slated for release in the second half of the year at a price tag of around $3,000. Apple may also release a cheaper version in the future. The appointment is for spring or at the WWDC in June.


Microsoft is currently addressing two major developments. On the one hand, the company is laying off 10,000 employees by the end of March but will continue to hire in "key strategic areas". The layoffs are expected to primarily affect employees working on HoloLens and Microsoft Edge, but also those involved in marketing, 343 Industries and Bethesda. On the other hand, Microsoft is discussing investing up to $10 billion in OpenAI, the creator of the ChatGPT platform, and will take 75% of the profits until the initial investment is recovered. Later, he owns a stake in OpenAI's 49%. This news comes amid speculation that Microsoft is planning to incorporate OpenAI's technology into its Office and email software products.


In general, the fourth quarter of 2022 for Alphabet, the company that controls Google, saw a decline in advertising revenues, which were 59.4 billion dollars, against 60.4 billion expected. However, the cloud has helped keep the situation under control, with revenues increasing from $5.5 billion in 2021 to $7.3 billion. Youtube also saw a 7.8% decline in advertising revenue, while search revenue fell from $43.3bn a year earlier to $42.6bn in Q4 2022.

Google recently announced a conference to introduce Bard, its LAMda-based answer to ChatGPT, and more is expected to come during Google I/O in May, especially in response to ChatGPT and Microsoft.


Amazon announced 18,000 job cuts, representing approximately 1% of the company's total workforce. These layoffs were caused by the increasing use of ChatGpt to review and fix employee-developed code.

The fourth quarter of 2022 was a period of successes and difficulties for Amazon. Sales revenue increased 9% from 2021 to $142 billion, but net income fell to $0.3 billion, 14 less than the same period a year earlier.

Cloud services division revenues grew 20%, but that wasn't enough to offset lower operating profit, which fell to $2.7 billion, down $800 million from the fourth quarter of 2021.


Meta's state of affairs is a mixture of adversity and opportunity. On the one hand, the company is currently facing challenges such as employee layoffs and the exit of key figures, as well as spending billions of dollars on virtual reality projects with no immediate results. On the other hand, Facebook (now Meta) continues to be the largest social network in the world, with 2 billion people active every day and an increase of 5% monthly active users. The decline in advertising revenue due to Apple's policies and the global situation has been exaggerated, with a 4% decline in the fourth quarter of 2022 but a rapid 27% increase in share value. Additionally, Meta is the only major tech company to have positive revenues for the quarter at $32.2 billion, beating analyst estimates.

Artificial Intelligence: the game changer?

In terms of artificial intelligence, all the Big Techs seem to invest heavily in this sector, with Google having invested more than 100 billion dollars in AI in the past few years. Amazon has already built AI into many of its features, such as the recommender system, while Apple is investing in a mixed reality headset. Meta is also investing in AI, especially in its hardware products. Bottom line, 2023 could be a watershed year for Big Tech. Apple and Google suffered dips in their financial results in 2022 but are working hard to reemerge stronger than ever. The growing focus on privacy and Big Tech regulation could lead to significant change in the industry, but that won't stop companies from continuing to innovate and grow. Big Tech will continue to lead the market and influence the daily lives of consumers around the world. It will be interesting to see how they evolve over time and how they cope with future challenges.

The world is changing and those who are successful learn to innovate their own products along with their own processes and at people.

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