Silicon Valley is in chaos.
Almost all of the major big tech companies are collapsing; for example, Mata was worth more than a trillion dollars in 2021, but that value has dropped by two-thirds just a year later, and the other Giants on the Farm are trailing Amazon, Meta, and Twitter.
Tesla and Netflix have seen massive revenue drops, and the magnitude of these losses is unprecedented, especially given that big tech has been unstoppable for the last decade, with revenues and profits skyrocketing.
Silicon Valley was a billionaire factory, with some of the most prolific billionaires building their names and bank accounts on the backs of big tech companies.
Bill Gates, Elon Musk, Jeff Bezos, Mark Zuckerberg and Jack Dorsey All of them were created by the massive tech boom of the last four decades, but then their bubble popped, and now the biggest names in Silicon Valley are seeing their revenue plummet, firing hundreds of thousands of employees, and the stock value of almost every big tech company falling dramatically, which leads us to the question, “How did it get this bad so quickly?” Well, you see, for years, technology has been a growing part of the world’s economy.
Over the last decade, tech companies have only grown larger and larger.
Of course, there have been ups and downs, such as the dot-com crash in the late 1990s and the catastrophic consequences of overvaluing tech companies, but the industry has always picked up again over time.
It was a measured climate at first, but soon people forgot the mistakes of the past, and as the years rolled by and technology improved, the company’s behavior increased in censorship and hatred.
As time passed, the cycle of cultural deterioration intensified, and changes in the online space were mirrored in the real world, leading to Riot’s unrest and collapse.
It didn’t matter to the tech companies, even though it was in their best interests, and instead of addressing the problems caused by their algorithms, companies began to rely more heavily on censorship, suppressing all counter-opinions in the name of misinformation.
This solution wouldn’t work forever.
The tech companies were going to pay the cost of their meddling in public discourse, but for now, they had to deal with a much more conventional problem: over the last decade, China has exploded into the technology industry, with companies like Tencent and Huawei eating into Western market share on a global scale.
Tencent has made numerous takeaway servers of Western companies like Riot, Epic Games, and even Ubisoft, and through these moves, they’ve undermined Western dominance in the lucrative gaming industry, with China earning some of today’s most popular games like Four Nights in L.A.To put it simply, this is a targeted attack on Silicon Valley.
All of these companies have incredible close relationships with the CCP, which has given them enormous room to scale up because, no matter how profitable they are, they’ve always had the CCP’s support.
They can be safe in the knowledge that as long as they toe the party line, they can get away with almost anything, and this isn’t just within China, but everywhere they get government backing outside of China, as all of these Chinese big social media sites are practically a third party of the Chinese government, and as they work in tandem, these companies have become an unstoppable force, and so while Western tech companies aspire to be ethical impediments or even proponents of the I started my mornings aimlessly scrolling through my phone watching mind-numbing content, but now with Morning Brew, I get a summary of relevant stories that are really informative, for example.
I learned that Tesla stock prices have been falling after the company delivered fewer cars than expected, causing the company’s devaluation to drop by 65 percent in 2022 alone, and morning Brew highlighted that the reasons for this go much deeper than Musk’s ownership of Twitter, instead highlighting how Tesla production slowed due to Chinese lock-downs, cooling demand for electric cars, and lower gas prices, in addition to Musk’s ownership of Twitter. If you’re interested in business finance or tech, it’s completely free and takes less than 15 seconds to subscribe, so sign up for free by visiting morningbrewdaily.com/moon.
These problems are still on the horizon but haven’t affected the numbers yet.
Apps like TikTok were only just getting started, and massive growth was still expected.
And by the end of 2016, some journalists were hailing Silicon Valley as the future because something dramatic had changed the list of the top companies, which used to always be dominated by all things manufacturing and a few things financing.
he best example of this is Uber, which spent years entirely focused on growth above all else.
They embodied the Silicon Valley mantra, breaking laws in industries to cement their market position with a massive leak showing Uber executives instructing their employees to use chaos and violence to operate the taxi industry and put pressure on governments, and of course they had Fading Into the ground, but Uber still has a chance as Silicon Valley overconfidence has led to far more destructive collapses, specifically in the case of WeWork in early 2019.
Reality hit the company hard, and today people are questioning the expiry date of WeWork, but Silicon Valley didn’t learn from this example despite the very same business practices being used across tons of tech companies. This was just seen as an isolated case by the tech elite, and besides, now wasn’t the time to consolidate and slow down.
And then, as 2019 came and went, the world was forced into the pandemic.
Apple spent an extra 90 billion dollars just buying back their own stock during the pandemic, betting an amount greater than the GDP of Sri Lanka on their continued success.
You see, tech companies made massive investments in themselves, betting that the good times would never end, and it was this overconfidence that meant that when their profits finally did start to slow down, they wouldn’t be able to cope with it.
But overconfidence wasn’t the only issue that worsened.
The meta revenue growth had risen to over 50 percent in the summer of 2021, but it dropped sharply over the next nine months, falling to just five percent by the first quarter of 2022.
Amazon also saw a sharp decline in growth from more than 40% to around 7% in the same time period, and even usually stable companies like Microsoft and Apple suffered the same fate, seeing their growth levels fall off.
So what happened here was that all of the growing problems that Silicon Valley thought they could ignore
While they had been shielded from the pandemic recession by artificial demand, essentials became more expensive, resulting in less disposable income; service stores benefited from people making up for lost time; and, on top of that, the culture war had kicked out a large number of people, resulting in fewer uses of social media.
A Canadian survey found that fewer people were using Facebook, YouTube, and Twitter in 2022 than in 2020, and the only tech company that was spared from the decline was TikTok.
Their growth was unimpeded, maybe because they’re artificially propped up by the Chinese government, but it was clear for everyone in Silicon Valley that they were losing their audience’s attention, and with this dramatic reduction in intention came dramatic cuts in their profits.
The show began when the crack appeared.
Tech companies have become so focused on growth that when it dried up, it hit them much harder than other industries.
Over the course of 2022, they lost more and more money, leading their CEOs to make some erratic decisions.
Moss took over as CEO of Twitter after years of negotiations and legal battles.
He started off by firing large parts of the workforce, leading to massive technical glitches and problems with the app.
Things were going so badly that he was forced to resign from the company.
Google had put much of their focus on their new stadium cloud console, but as with every other big tech company, 2022 also saw its demise as it was forced to refund everyone who bought it without Google actually getting the products back.
Additionally, Uber saw a way to climb their business to rivals’ levels through massive leaks and higher prices.
As 2022 approached and tech companies realized it wasn’t going to get any better anytime soon, they needed to cut costs, which is why you started to see articles about these big tech companies firing tens of thousands of employees, such as Microsoft firing over 1000 employees and Stripe, a growing startup, letting go of 14 of their workforce.
Elon was forced to fire nearly 4000 Twitter employees, and Meta quickly followed suit, firing another 11 000.
Amazon caught up by ten thousand, and all of this happened in just over a month.
Eventually, Amazon would double their numbers in December because they clearly hadn’t shrunk enough, and these were minimum-wage employees.
They were both highly skilled and extremely expensive employees, and in total, 1,000 tech companies fired over 150,000.
Silicon Valley had made its bed with its risky investments and growth-focused ethos.
The same companies that fought over these workers in the Talon Wars, which was just a year or two ago, were now letting them go and incurring massive costs in the process, and it wasn’t just going to cost them at the time either.
These firing sprees represent a massive number of people with incredibly valuable skills.
Seekers who have been laid off have seen the fast life of big tech companies and are now looking to make a difference despite a small pay cut, and this is one of the ways in which big tech’s demise can be seen.
will inadvertently benefit the world, but perhaps this is symptomatic of a much larger trend in our economy, as going into 2023 with the UN predicting we’ll be in a massive recession, it seems like Silicon Valley can only expect more and more suffering.
Apple and Microsoft are also abandoning big tech, with their clout undermining Microsoft’s $69 billion acquisition of Activision, and Monopoly is debating Blizzard.
The FTC has already attempted to block it, and the entire tech industry is waiting for another verdict on recommendation algorithms.
Google is being sued for recommending videos made by terrorists, which then incite an attack in France, and if they’re found liable, this will upend years of legal The results of the case will dictate what’s allowed for years to come and may affect companies like Google and Mata.
It is very clear to everyone in the tech world that 2023 is going to be the true test for these tech giants, and so far, only a week into the year, Amazon is already shedding another 18 000 jobs, with more cuts expected in the next few months. It should be clear by now.
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