Big Tech Will Get Back to Real Tech in 2023


What to expect in 2023: The tech bubble has finally burst. Big Tech’s expansion during the pandemic has sparked a flurry of over-hiring and bonkers valuations among tech startups, leading to a sharp correction at the end of 2022. Reality is setting in this coming year, and expect tech firms to cut back on their notoriously generous perks and refocus — I’m looking at you , Meta Platforms Inc. – to traditionally reliable business models such as advertising and cloud computing. Venture capitalists, who are helping to fuel the industry’s latest trends, will also favor pure-tech businesses—think enterprise software and cybersecurity over grocery delivery and telemedicine. Or, more practically speaking, higher margins compared to businesses that are capital intensive and competitive.

Elon Musk’s radical streamlining of Twitter may inspire other social media chiefs to return to their age-old argument about being “tech firms” first, tempting them to emphasize AI development and engineering over political work. That would be a mistake, as two major new European Union laws are on the way(1) that will dictate how these companies should monitor the content and data on their sites and how they interact with competitors. However, one high-tech field probably won’t see much use: metaversion.

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Software firms will also try to find ways to make money from generative artificial intelligence, machine learning systems that can write essays and create images and videos. The models on which these systems are based brought several major breakthroughs in 2022. This year, companies like OpenAI, one of the leading producers of generative artificial intelligence, will have to answer tough questions about how to prevent their systems from manipulating people or spreading disinformation on a large scale. Apple Inc. lags behind in its own AI development and will likely need to buy a generative AI firm.

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Being a woman in the Metaverse is awkward: Meeting people in virtual reality is fun, but more complicated than Mark Zuckerberg’s vision. Also watch out for foul mouthed and grieving children.

Facebook may have peaked: The social network’s first-ever decline in daily users was a landmark. As Zuckerberg quixoticly heads toward the metaverse, it’s hard to see the company returning to growth.

No one knows you’re a kid on the Internet—yet: Lawmakers are pushing tech companies to make the Web safer for kids. But their proposals won’t do much without strict standards for age verification that no one can agree on.

Wordle, BeReal and even Facebook: Apps are less addictive: The growth of apps that value connection over obsession marks a healthy shift in social media. Just look at BeReal once a day.

Facebook, Beware: The Metaverse Is Flat: Most people visit virtual worlds through plain old screens on Roblox and Fortnite. Mark Zuckerberg needs his metaverse to be less dependent on VR glasses so that millions more people can access it.

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Creative AI raises some messy issues: Generative AI that can write blog posts and create images is a hot new trend in tech circles, but it comes with thorny legal issues.

Musk’s Twitter won’t die. Check out Telegram: Telegram is an even bigger social network run by a libertarian billionaire. Its popularity should dispel any notion that Twitter will disappear.

(1) Digital Services Act and Digital Markets Act

This column does not necessarily reflect the opinion of the Editorial Board or Bloomberg LP and its owners.

Parmy Olson is a Bloomberg Opinion columnist covering technology. A former reporter for the Wall Street Journal and Forbes, she is the author of “We Are Anonymous.”

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