Big tech back to real tech in 2023
The tech bubble has finally popped. Big Tech’s expansion during the pandemic sparked a rush of over-hiring and preposterous valuations among tech startups, leading to a sharp correction at the end of 2022.
As reality sets in through this coming year, expect tech firms to cut back on their infamously generous perks and refocus — I’m looking at you, Meta Platforms Inc — on traditionally reliable business models like advertising and cloud computing.
Venture capital investors who help foment the industry’s latest trends will also reprioritise pure tech businesses — think enterprise software and cyber security instead of food delivery and telemedicine. Or, in more practical terms, higher margins over businesses that are capital-intensive and competitive.
Elon Musk’s radical streamlining of Twitter may inspire other social media bosses to go back to their age-old argument about being “tech firms” first and foremost, and tempt them to emphasise artificial intelligence development and engineering over policy work.
That would be a mistake, as two major new laws from the European Union are coming down the pipeline, which will dictate how those companies should oversee content and data on their sites, and how they interact with competitors. One high-tech field probably won’t get much traction, though: the metaverse.
Software firms will also scramble to find ways to make money from generative AI, machine-learning systems that can write essays and create images and videos. The models underpinning those systems made several big breakthroughs in 2022.
This year, companies like OpenAI, one of the leading generative AI producers, will have to answer tough questions about how they will prevent their systems from manipulating humans or spreading misinformation at scale. Apple Inc has been lagging behind in its own AI development, and will likely need to buy a generative AI firm.
FROM THE YEAR BEHIND US:
It’s awkward being a woman in the Metaverse: Meeting people in virtual reality is fun but messier than Mark Zuckerberg’s vision. Also beware the foul-mouthed kids and the griefers.
Facebook has probably peaked: The social network’s first ever drop in daily users was a landmark moment. As Mr Zuckerberg steers quixotically towards the metaverse, it’s hard to see the company heading back to growth.
On the internet nobody knows you’re a kid — yet: Lawmakers are pushing tech companies to make the web safer for children. But their proposals won’t do much without strict standards for age verification which nobody can agree on.
Wordle, BeReal and even Facebook: Apps get less addictive: The growth of apps that prize connection over obsession marks a healthy shift in social media. You only need to look at BeReal once a day.
Facebook, beware: The Metaverse is flat: Most people are visiting virtual worlds through plain old screens on Roblox and Fortnite. Mr Zuckerberg needs to make his metaverse less reliant on VR goggles, so that millions more people can access it.
Creative AI is generating some messy problems: Generative AI that can write blog posts and create images is the hot new trend in tech circles, but it will come with thorny legal challenges.
Musk’s Twitter won’t die. Look at Telegram: Telegram is an even bigger social network run by a libertarian billionaire. Its popularity should dispel all notions that Twitter will disappear.