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Amazon R&D spending is more than that of all companies and government of France
- lnxg33k1 3y agoI suspect its just a tax break related policy, ive been doing the same shit at US companies (still in EU), and some European companies (in EU) and the US one were the only one asking me to file reports for hours classified as R&D, maybe european ones have no incentive to do that Id say, considering that, and considering that for these corps taxes are lava, i’d go to look at incentives on taxes about R&D filing
- wharvle 3y agoCan confirm, filed some “R&D” hours at a company some years back that did software development but nothing I’d call “R&D”. They straight-up told us it was a requirement for some tax benefit or other. Like they did have us do it only on non-client work, but… it was not really R&D the way anyone means that.
- richbell 3y agoMy friend's company hires one of the big consulting firms every year to create a report of all their "innovative" research and development. It's both hilarious and disheartening how much of a tax grift it is.
- lttlrck 3y agoSame. R&D included anything that wasn't not finished or had a roadmap that extended beyond the end of the year. In other words: unproven. If you squint that is R&D.
- eru 3y agoThe D in R&D literally stands for development. So 'software development' would fit.
- Jensson 3y agoRight, software development, but not software maintenance. The issue is with companies filing maintenance under development, since both of those has the same "Software Engineer" title. In other industries there is usually a very clear separation between development and maintenance.
- eru 3y agoWell, software doesn't need any traditional maintenance. It doesn't wear out. Any maintenance is new development.
- rightbyte 3y agoIt is research and development. Not 'or', though. I mean I work in a RnD dep. now and it honestly is some R but like 2% of my time.
- eru 3y agoAre you suggesting that a company that only does Research but no development (eg because they are selling the patents afterwards or so), should not be classified as doing R&D? I took R&D as the bucket that we put both research and development into.
- PeterStuer 3y agoWhat is R, D or non of the above is a spectrum. Public funding and tax favoring regimes in the EU mostly use the TRL framework for classification. https://en.wikipedia.org/wiki/Technology_readiness_level https://en.wikipedia.org/wiki/Technology_readiness_level
- ChadMoran 3y agoCapEx vs OpEx. CapEx can be written off.
- redandblack 3y agoThe department I got hired into my 1st job was called Corporate Research & Development, and reported to Finance
- nudgeee 3y agoI have the opposite experience, I’m based in NL. Of the 2 EU companies I worked for they both asked to fill timesheets. And of the 2 US companies I worked for (also based in NL), none asked for timesheets.
- gumballindie 3y agoBeen doing the same in the UK. Everything not BAU was R&D. Installed a new server package and configured it? R&D baby. Or so I was told, because you know, it’s new to the company ;) ;)
- rjh29 3y agoAlso UK and I know we devoted pretty serious manpower to tracking timesheets and writing up R&D reports of projects to get a tax deduction.
- nraynaud 3y agoFrance has a giant research tax break that is very wildly misused by corporations who put development in it. There are even service companies with “research centers” now. They simply bill employees without a client to the state for doing “research” that mostly consists in completing tutorials on the latest trendy technology at the HQ.
- acchow 3y agoSo instead of spending $0 on not having that employee, the company would rather hire than employee for $50k to get back $25k in tax savings? This doesn't seem like a profit-driven decision.
- lnxg33k1 3y agoThe thing is $25k of software production is left at the company, and when the employee is not needed anymore, then the collectivity has to pay for unemployment
- kthejoker2 3y agoThat $0 is on a day by day basis. "Riding the bench" in between project bookings is common, especially for junior consultants with limited skills. Bench / sub 100% utilization is one reason consultants cost so much.
- metaphor 3y ago> I suspect its just a tax break related policy 1. What publicly-traded companies report to investors and what they report to the IRS are more different than you might initially suspect. 2. This $73.2B figure was pulled directly from their 2022 10-K filing[1] under an ops expense line item labeled technology and content, which includes R&D and then some. The devil in the details is buried in a footnote on p. 26: >> Technology and content costs include payroll and related expenses for employees involved in the research and development of new and existing products and services, development, design, and maintenance of our stores, curation and display of products and services made available in our online stores, and infrastructure costs. Infrastructure costs include servers, networking equipment, and data center related depreciation and amortization, rent, utilities, and other expenses necessary to support AWS and other Amazon businesses. At face value, to handwave this figure as just R&D and purport that it's directly comparable to other publicly-traded companies who report disaggregated research and development strikes me as somewhere between shotgun analysis and hoodwinking. [1] https://www.sec.gov/Archives/edgar/data/1018724/000101872423000004/amzn-20221231.htm#icc32c5c732854b7f9975929c57cd5bd4_97 https://www.sec.gov/Archives/edgar/data/1018724/000101872423...
- deleted 3y ago[deleted]
- PeterStuer 3y agoAt least for public funding (subsidies) EU companies are required to have full hourly accounting of time spent.
- dekhn 3y agoI believe Amazon classifies all costs of software engineering under R&D.
- dilyevsky 3y agoSection 174 is about to change that…
- xvector 3y agoSection 174 is a harebrained law aimed solely at "punishing" successful engineering companies. It is a Trump-era law designed to appease voters mad at what they view as successful big tech "intelligentsia." It will destroy startup culture. I can't wait until we automate the people cheered this law on, out of a job.
- lnxg33k1 3y agoAs a software developer I also salute that law, As italian I always voted against governments who wanted to detax r&d, if its done and funded by governments for the collectivity, then it benefits everyone, but if a private company is going to r&d for the benefits of their shareholders, then they can also pay their fair share of taxes instead of leeching from the collectivity I always felt, from outside, that anti trumpers just are against everything he does with simplistic explanation, its a good law amazon has enough money to pay their own r&d
- xvector 3y ago> if a private company is going to r&d for the benefits of their shareholders What if the R&D is open-sourced? Or what if the R&D would be for a product genuinely beneficial to people? Think a new drug, or infrastructure like Google Maps, etc.
- iancmceachern 3y agoThe people who make a living doing the work need to be paid somehow.
- WhereIsTheTruth 3y agoSeems like a giant waste, where is my thorium power plant? where is my new battery tech? where is my fleet of robot farmers?
- pie420 3y agobest i can do is more intrusive ads
- dmvdoug 3y agoAnd the Jetsons promised me flying cars when I was a kid.:(
- FirmwareBurner 3y agoElon promised us Model 3 robotaxis in 6 months 4 years ago.
- kube-system 3y agoThere's a lot of agtech stuff running on AWS. e.g. https://aws.amazon.com/solutions/agriculture/ https://aws.amazon.com/solutions/agriculture/
- GuB-42 3y agoI don't know about your thorium power plant but Tesla is giving you battery tech, and John Deere (~2B$ in R&D) is essentially giving you a fleet of robot farmers. These are not flying cars, but batteries that are 5 times cheaper in 10 years is impressive. I don't know much about farming but it looks like now, tractors do most of the job, and the guy in the cab is just checking to see if everything goes well. Farmers are still needed, be we need less and less of them for bigger and bigger fields.
- albert180 3y ago"Tesla Battery Tech" is called Panasonic and CATL Battery Tech
- ycdxvjp 3y agoCompare Capex. That's a better indicator of long term spending.
- simonw 3y agoDoes that Amazon number include the cost of physically purchasing and installing all of those AWS server farms? Building robotic warehouses? I get that they have high R&D costs but I'm still trying to get my head around how that money is being spent.
- lnxg33k1 3y agoBring the corporate version of Dr Evil into space
- simonw 3y agoLooks like the numbers being described are here: https://ir.aboutamazon.com/news-release/news-release-details/2023/Amazon.com-Announces-Fourth-Quarter-Results/ https://ir.aboutamazon.com/news-release/news-release-details... This bit: Cost of Sales: 272,344 Fulfillment: 75,111 Technology and Content: 73,213 Sales and Marketing: 32,551 General and Administrative: 8,823 Other Operating Expense (Income), Net: 62 So Technology and Content is the $73bn number. I think Fulfillment covers warehouse and delivery costs. "Technology and Content" presumably mixes in Amazon Prime studios, which apparently was $16bn in 2022: https://techcrunch.com/2023/02/03/amazon-ramped-up-content-spending-to-16-6b-in-2022-including-7b-on-originals/ https://techcrunch.com/2023/02/03/amazon-ramped-up-content-s... My guess is that it covers AWS infrastructure too.
- robertlagrant 3y agoSurely the $1bn on Rings of Power isn't "R&D"?
- avsteele 3y agoReally interested in the YoY 2021 vs 2022 and if its related to: https://news.ycombinator.com/item?id=38120388 https://news.ycombinator.com/item?id=38120388
- testless 3y agoI am really confused as to why this is considered as a tax break strategy. Operating costs directly lower earnings, where as R&D might have to be amortized over years - at least in certain european countries. Isnt this reinvesting in your business? Also spending (or donating) money lowers your taxes by lowering your earnings.
- robertlagrant 3y agoReinvesting in your business is something you get to do post-corporation tax.
- hn_throwaway_99 3y agoThere are specific R&D tax credits in the US tax code: https://pro.bloombergtax.com/brief/rd-tax-credit-and-deducting-rd-expenditures/ https://pro.bloombergtax.com/brief/rd-tax-credit-and-deducti...
- pyrale 3y agoUsing the very same numbers, Amazon's R&D would be 11% of all US R&D. I suspect the numbers are wrong.
- 3abiton 3y agoOrnas others pointed out, Amazon is boosting its RnD reporting.
- eru 3y agoWhy isn't the rest of the US boosting their reporting?
- lnxg33k1 3y agoI suspect the same reason why not all US citizen pee in a bottle
- eru 3y ago?
- lnxg33k1 3y agohttps://www.forbes.com/sites/katherinehamilton/2023/05/24/delivery-drivers-sue-amazon-for-being-forced-to-pee-in-bottles/ https://www.forbes.com/sites/katherinehamilton/2023/05/24/de...
- eru 3y agoI don't understand. How you decide to treat employees is quite different from what tax shenanigans your lawyers and accountants cook up.
- pyrale 3y agoI mean, sure, maybe they are cooking their numbers. My own hypothesis was that the first table and the second table don't measure the same thing. Which would mean the headline is comparing apples to oranges.
- pmarreck 3y agoAnd yet Alexa still sucks compared to modern LLM's
- Marsymars 3y agoSeems to me like products with entirely different use cases. Alexa's not so good at generative text content, but ChatGPT isn't very good at triggering kitchen timers and home automation shortcuts via voice command.
- pmarreck 3y agoIt's quite capable of doing so though: https://johnthenerd.com/blog/local-llm-assistant/ https://johnthenerd.com/blog/local-llm-assistant/ There is nothing technically stopping ChatGPT from hitting up endpoints with JSON other than OpenAI's forced limitations. It has excellent voice to text, excellent text to voice, excellent comprehension (it can understand vague commands like "set all the lights in the house to a Christmas color theme") and it knows how to generate JSON in a particular format that you can specify. That plus an output scraper that knows where to send the JSON to is pretty much all you need to make this work. It's so close to a commercial product that I can literally taste it. And yet here we are, having to hack together our own solutions... with local LLM's that are about as good as GPT 3.5.
- Marsymars 3y agoFor me, the pinnacle of smart home voice automation would be a fully local voice interpreter that runs on some low-power device that I already have (like, say, an Apple TV), that supports some fixed, explicit set of commands that are easy to reference and/or modify, that has rock-solid reliability and that runs deterministically. To me, it feels like Siri/HomeKit (or even Home Assistant/Assist) has a much clearer path to that ideal than ChatGPT spitting out JSON.
- pmarreck 3y agonothing says you can’t have both your set of explicit commands and inference for when the command has not been defined yet
- agumonkey 3y agoThere are cheaper ways to stop scams and false products, they can just shut amazon, no need for PhDs
- kderbyma 3y agotaxes. the way that R&D is measured is very tied to the tax code in countries. If R&D is economically promoted (historically the USA has invested much more money into R&D than other nations per capita because other nations tend to favour tax credits as opposed to direct investment - which seems like it opens the door for foreign investment to control a large percentage early in a startups life in exchange for tax credits after investment has dropped into their borders)
- growingkittens 3y agoThese mega companies like Amazon are "too big to regulate." Our legal system hasn't scaled in response.
- thrawa8387336 3y agoRegulation is as bad or worse. Even less accountability
- growingkittens 3y agoDo you have any particular reason for saying so? No regulation is bad or worse. Even less accountability.
- rqtwteye 3y agoMaybe they need to spend even more to figure out how to show Adidas shoes when I search “Adidas shoes”. Seems that’s a really hard CS problem. Once they have that, maybe they can show products ordered by price when I select “Sort by price low to high”.
- PaulDavisThe1st 3y agoYou must have some sort of poisoned history with amzn. I just tried what you describe, and it works perfectly.
- snewman 3y agoTossing another anecdote onto the pile, I just searched "Adidas shoes". The first four hits are not for Adidas shoes, after that they all are. All four of those non-Adidas hits are "Sponsored" results, but that's not particularly easy to notice (for one of them it's almost impossible). I would agree with GP that Amazon product search often leaves much to be desired. It's hard to search for X without getting accessories for X, competitors to X, products that can be connected to X. This is annoying at best, and crippling if you want to, say, sort by price (all the cheapest matches will be accessories or otherwise not what you wanted).
- jknoepfler 3y agoIt's just classical enshitification. Now that Amazon has captured user-share, they will (ineluctably) abuse user good-will (by padding search results with ad-placed products the user does not want) until they reach some marginal breaking point. The users that remain are either oblivious or cursed with a lingering taste of bad-faith and bullshit. Eventually the giant will strangle itself in its sleep, but that's probably 50+ years out given how these things go.
- nickstinemates 3y agoSame exact experience.
- Thaxll 3y agoThere is not a single chance that Amazon spends $73B/year in R&D, numbers are completly wrong or they mean something different.
- bertil 3y agoProduct development, as in product teams and writing software, i.e., what most people at Amazon or on Hacker News do, is R&D.
- gumballindie 3y agoThe right tax advisor can do a lot of magic.
- hn_throwaway_99 3y agoLike many of the comments here, I'm very curious what counts as "R&D" spend by Amazon. My guess (and happy to be corrected if I'm wrong) is that it includes a big chunk of AWS capex spend. I think it's great that Amazon invested so much into AWS, but it then also isn't surprising that the company that runs a huge portion of the Internet has large "R&D" spend.
- ethbr1 3y agoExactly, or to put it another way, what would big tech companies classify the bulk of their expenses as, if not R&D?
- Marsymars 3y ago"Operations", I'd expect. If you imagine a tech company that declares that they're feature-complete, and they cut expenses to those required to maintain existing service to a high degree of quality/reliability, that seems like a reasonable benchmark of spending that could be classified as "not R&D".
- alberth 3y agoIt's no surprise, Amazon market cap is > 50% of the entire country of France GDP. Amazon market cap: $1.6T France GDP: $2.9T These numbers would be skewed even more if Apple ($3T) or Microsoft ($3T) were used instead. https://finance.yahoo.com/quote/AMZN/ https://finance.yahoo.com/quote/AMZN/ https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=FR https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locat...
- boyd 3y agoFeel obliged to point out this is misleading / not especially relevant: GDP is the value of the annual output of a country, while market capitalization is the (discounted) value of all future cash flows of a company. LVMH is ~0.5T market cap French company, but it’s nowhere near 1/6th of French economic output. This is a lot like the recent “Novo Nordisk’s market cap is greater than the GDP of Denmark!” comparisons — true, but they’re not like numbers (and indeed, much of Novo Nordisk’s revenue is captured in Danish GDP).
- alberth 3y agoHere's another comparison: # of Amazon employees: 1.7M # of working people in France: 30M https://en.wikipedia.org/wiki/Amazon_(company) https://en.wikipedia.org/wiki/Amazon_(company) https://tradingeconomics.com/france/employment-rate https://tradingeconomics.com/france/employment-rate
- thaumasiotes 3y ago> It's no surprise, Amazon market cap is > 50% of the entire country of France GDP. That isn't a comparison that makes sense. It's sort of like confusing stocks and flows, but market capitalization isn't even a stock.
- gotmedium 3y agoPlease remember that any publicly-traded company must follow guidelines, US-based or otherwise. There are rules for what constitute R&D for those who want to understand why 'company asked me to fill a report' https://www.irs.gov/businesses/corporations/irc-41-asc-730-research-and-development-costs https://www.irs.gov/businesses/corporations/irc-41-asc-730-r...
- eru 3y agoNon-US based publicly traded companies would likely not have to follow guidelines of the American IRS? (Though, of course, that might be wrong. American SEC tries to have global jurisdiction, whether you want them to apply to you or not. Matt Levine writes about that a lot in his 'Money Stuff'.)
- paxys 3y agoThe "D" in R&D is development, i.e. software engineers writing day-to-day product code. So R&D budgets cover the majority of employee salaries and even stuff like cloud hosting. It's not earmarked for groundbreaking research as people seem to think.
- dharmab 3y agoWhen I worked at $BIGCORP we tagged all cloud accounts and Kubernetes Namespaces not serving production workloads as R&D ^
- interactivecode 3y agoPerhaps when companies or departments get to that scale they should get the responsibilities of a country like France. think employee protections, voting about decisions and direction, etc...
- sidcool 3y agoThis is a smart accounting trick to work around taxes. No doubt Amazon and others do a lot of R&D. But when such comparisons are made with Europe, some details need to be understood.