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What do other companies do about having test databases?

We've been having a discussion at work about restoring the Production database in a test environment so we could use it for our testing. There's already a test database but it's outdated and doesn't have the latest data.

We can't replace the existing Test database because some team members are using the data.

The production database is big. In TB size. Now, we're going into year 2021 and extra space shouldn't be an issue, right? looks like it is at company.

What do other companies do for backing up and restoring a database of xyz TB size?
1. Have it in the AWS? (someone suggested this)
2. Buy what...extra disk space?
3. Cherry-pick data from Production and only restore a subset of data?
 
Take for example companies like Bank of America. What do they do to provide a backup of their production database for their developers?
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David Favor
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>>Generally you'll use a separate VM for Windows or an LXD container for Linux. 

IT guys are saying the database is too big to restore it somewhere else. I call BS on that :)
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>>So basically, 2 big copies, (PROD and QA) , and 1 small or subset for DEV, and 1 controlled set for preparing what would later go to the TEST instance, these are 'standard'  in oracle environments. 

We probably need a subset. Good idea.