The chart above compares the research and development expenses of two leading tech players – Amazon and Google. Amazon is known to be the largest R&D spender in the entire industry. Google’s R&D costs have also grown significantly in recent years. However, gap between the R&D spending of Amazon and that of the other leading players in the industry, is nothing less than enormous. Amazon’s R&D spending surpassed Google’s in 2016 and the gap has grown very wide in just seven years. In 2022, Amazon’s R&D spending was 1.85 times that of Google. While Google spent $39.5 billion on research and development, Amazon spent $73.2 billion. Google’s R&D spending grew by 25% in 2022, and Amazon’s increased by 30.6%.
A Comparison of the R&D Expenses of Amazon and Google
| Year | Amazon R&D Expenses (Mn) | Google R&D Expenses |
| 2022 | $73,213 | $39,500 |
| 2021 | $56,052 | $31,562 |
| 2020 | $42,740 | $27,573 |
| 2019 | $35,931 | $ 26,018 |
| 2018 | $28,837 | $21,419 |
| 2017 | $22,620 | $ 16,625 |
| 2016 | $16,085 | $13,948 |
| 2015 | $12,540 | $12,282 |
The leading tech brands spend a large fortune each year on research and development to find faster growth and improve their products and services. from Apple to Google, Microsoft, Amazon and Facebook, all the tech giants have experienced a sharp increase in their research and development expenses during recent years. Apart from increased competition, growing market demand and user base are the leading factors driving the fast growth in R&D related costs.
Amazon is the leading e-commerce and cloud technology brand in the world. The cloud and e-retail industries both are experiencing increased competition in recent years. As a result Amazon has continued to grow its research and development expenses year over year faster. In 2019, the research and development expenses of Amazon reached $35.9 billion, which was around 24.5% higher than the previous year. For several years continuously, Amazon has remained the largest R&D spender in the entire business industry followed by Alphabet, the parent company of Google. In the previous year (2018), Amazon had spent around $28.8 billion on research and development.
Compared to Amazon, Google (Alphabet) invested less in research and development. However, it is still the second largest R&D spender in the entire industry. The R&D expenses of Alphabet were $26 billion in 2019 compared to $21.42 billion in 2018, 21.5% growth year over year. Google enjoys the largest market share in online search and advertising. Most of its revenue is generated from digital advertising. However, the research and development expenses of Google have also grown very fast during the last five years. Its 2019 R&D expenses were more than double that of its investment in research and development during fiscal 2015, when it spent $12.3 billion on R&D.
The gap between Amazon’s R&D spending and that of the other leading R&D spenders in the industry has kept growing each year. In 2021, the difference grew substantially. Compared to Google, Amazon spent around $24.5 billion more on research and development. Amazon’s research and development expenses for 2021 remained $56.052 billion while Alphabet, the parent company of Google spent $31.562 billion on research and development. In fiscal 2021, Amazon had spent $42.74 billion on research and development compared to Google’s $27.573 billion research and development spending.