Attaching the Internet: Big Tech’s cloud coverage

Like physical clouds, the services provided by the tech giants are completely opaque to the outside world.

Cloud, amazon, aws, google, microsoft, algorithms, ai
Big tech companies collect huge rents by monopolizing cloud services that are provided at almost zero marginal cost (whiteMocca/

At the end of July this year Microsoft and Google’s parent company, The alphabet, presented their recent, relatively disappointing economic results, blaming the surrounding macroeconomic anxiety. However, both companies cited momentum in their cloud service as an important driver for future growth. The cloud was also responsible Amazon:better-than-expected quarterly data of .

The cloud includes computing services, including software, hardware and platforms, has been suggested over the Internet instead of running locally on individual computers. By 2025, 45 percent of the world’s data storage will be in the cloud. While these services are used by all types of companies and public sector organizations, cloud ownership is dominated by Amazon, Microsoft, and Google. They together concentrate around 65 percent of cloud infrastructure services.

Even a titan like Netflix: It recently said it relies on Amazon Web Services (AWS) and cannot easily switch to another cloud provider. Uber:which can only work with Google Maps, and Reservation have similarly recognized their dependence on Big Tech. Leading European corporations did the same 2021 report To the European Commission.

Exponential growth

Because the same lines of code can be used by many people at the same time, the reproduction costs of selling artificial intelligence (AI) algorithms as cloud services tend to be zero. Therefore, as Amazon, Microsoft, and Google expand their customer base, profits grow exponentially; AWS is Amazon. most profitable business. Moreover, as the AI ​​code leased as a service includes deep learning algorithms that learn as they process data, the more those algorithms will learn and improve, thus strengthening the digital leadership of the three giants.

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The trend towards market dominance based on privileged access to data is exacerbated by the fact that the code behind cloud services is not available to customers, becoming “locked in”. Customers know what certain services can be used for, but they can’t learn from leased code because they don’t have access to the algorithms that do those things, even if those algorithms exist. partially developed by universities and other public research organizations.

This is true even when those customers are other large corporations. Siemens, for example, is the European leader when it comes to numbers AI patents it was given. But Siemens is also dependent Big Tech on the cloud, including the most advanced, general artificial intelligence needed to run the more specific applications that Siemens integrates into its medical-imaging, energy and transportation products.

Just one year after the company launched Siemens MindSpherea cloud platform for storing and analyzing Internet of Things (IoT) data from the hardware it sells, AWS. take over part of the development of this platform. It provides computing services that Siemens cannot develop on its own, but which it needs to offer AI-specific solutions to its customers.

Addiction is risky

Such technological dependence is risky for at least two reasons. First, Google, Amazon and Microsoft have already entered Siemens’ medical business with the potential to become serious competitors.

Second, unlike the first wave of information and communication technologies, where adopters could learn by using and adapting technologies, leading to incremental innovations, cloud computing presents technology as a black box. It limits user learning and creates long-term technology addiction with no way out in sight.

All this while the tech giants’ algorithms develop themselves by processing data collected by companies such as Siemens, further widening the technology gap between cloud providers and other companies. As this dependency grows, Siemens may continue to scale back MindSphere’s own development, instead relying on Big Tech cloud services.

Siemens is one of thousands of companies basing its digital transformation on analytics, databases and IoT provided as cloud services by the tech giants. Use of these platforms as a service accelerates departure from reaching out to others, the Leviathans will further clog the public web of the Internet.

Assimilation of knowledge

Such economic power bypasses regulatory frameworks. Even that Digital Markets Actprobably the most advanced digital policy in the world, remains focused on markets; the concern is only on the tech giants as potential market gatekeepers.

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In the 193-page interim public version of this legislation, the term “cloud” appears only 14 times. Not a word is said about how Amazon, Microsoft and Google operate this aspect of their business, expanding their knowledge acquisition while subjecting other organizations; they are not only a market but also. gatekeepers of knowledge and information. If the European Union and other global regions are serious about introducing legislation that can counterbalance their power, this wider gatekeeping must be prevented.

The European Commission should pursue two fronts. Algorithms trained with data collected in Europe and based on collaboration with European universities and other research organizations should be made publicly available. At the same time, the EU should provide funding and research to create a truly public cloud.

Being on the edge of knowledge as a cloud provider will certainly be a big challenge, and it is likely that Europe will never catch up. However, if there is a backward region in the digital economy that has the scientific and technological foundations to experiment, Europe is it.

Does the EU have the political will to do so? That’s another discussion.

Cecilia recap 1

Cecilia Ricap is a lecturer in International Political Economy (IPE) at City University of London, a researcher at CONICET, the Argentine Research Council, and an associate researcher at the COSTECH laboratory. Université de Technologie de Compiègnee. He is an author Capitalism, power and innovation. intellectual monopoly capitalism exposed (Routledge) and coauthor Digital innovation race. in the concept of the emerging new world order (Palgrave).

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