They just have a ton of storage space, and they’re always adding more. Like you said, they have to keep adding enough to keep up with everyone’s uploads (500 hours uploaded per minute in 2019). So yes, that’s a lot! Plus they don’t just need to *store* everything, it all has to be online accessible too.
That makes running Youtube very expensive! Thankfully YouTube is owned by Google which is owned by Alphabet. They have many billions of dollars, and need to use a lot of it to build giant data storage centers and server networks all around the world. They use them to store and operate YouTube, as well as Gmail, Google Drive, FitBit, Nest, Waze, etc., which also take up a ton of storage. Building and operating truly massive quantities of data storage is like one of Google/Alphabet’s main actual “products”, which then gets used in different ways.
All that necessary expense is also why there’s more and more YouTube ads and also now YouTube Premium Subscription being aggressively offered to you.
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