tech winter
After two years of jubilation, global tech is going through a turbulent period. The giants of the sector have seen their share prices collapse over the past twelve months (-65% for Meta, -50% for Amazon, -40% for Alphabet, etc.). And after freezing their recruitments, many digital companies have embarked on substantial layoff plans (152,000 according to Layoff.fyi). The cold spell started in the United States, but is beginning to be felt on the old Continent: in 2022 the valuations of European start-ups lost 400 billion euros, reveals the report of the venture capital fund Atomico.
Inflation, rising interest rates and the war in Ukraine are prompting investors to be much more selective than in the past. That’s not a bad thing because 2021 had been the year of a lot of excess, now on a drip from lame ducks to the smoky business model. In these difficult times, useless gadgets and apps are losing their aura and attention is refocusing on strategic technologies (health, climate, cybersecurity). “In crises, we always come back to the bottom of Maslow’s pyramid which prioritizes needs”, summarizes Cyril Vart, executive vice-president of EY Fabernovel.
The surge of generative AIs
Generative artificial intelligences are the sensation of the moment, and for good reason: their rapid progress now allows everyone to create impressive drawings by describing in a few words what they want to represent (an astronaut on the back of a unicorn , the New York of the Roaring Twenties, grandiose alpine peaks…). We were thus able to admire the works of tools such as Dall·E 2, Stable Diffusion or Midjourney throughout the year. And in December, a generative text AI, ChatGPT, distinguished itself by producing amazingly consistent texts on demand on a wide variety of subjects.
Of course, these AIs sometimes make mistakes, producing comically failed drawings or texts well turned but seriously erroneous on the bottom. They also raise dizzying questions in terms of intellectual property. However, technical progress is immense and will disrupt many industries (graphics, games, computer development, etc.).
Elon Musk and Twitter: the most tumultuous marriage of 2022
Twists and turns… Elon Musk’s takeover of Twitter kept us on our toes almost all year. The billionaire’s starting bet is not stupid because the blue bird has a lot of potential: it has a confidential audience if we compare it to a Facebook or a TikTok, but it has a great influence on opinion leaders. And the old management had not boldly explored the network’s monetization levers.
However, the takeover of the platform was chaotic: after committing to buy Twitter, Elon Musk began to denigrate it and tried – without success – to back down. Forced to keep his promise to purchase, he shortly after implemented a drastic redundancy plan. For now, Elon Musk shows that being a social media star (he has 123 million subscribers) does not make you the best manager. Very upset against the (real) scourge of fake accounts on social networks, Elon Musk, for example, made the problem worse when he arrived. And if he makes the right diagnosis when he turns away from the free model out of breath, he has not yet offered an innovation that is impressive enough to hope to convince large numbers of users to suddenly pay 8 € /month.
The worrying point of this saga, however, is the attacks that Elon Musk makes against some on the platform he now holds. On December 11, he called on Twitter to bring Anthony Fauci, President Joe Biden’s Covid adviser, to justice, to the delight of antivax spheres.
Cyberattacks: the worrying digital pandemic
The recent attack on the André-Mignot hospital in Versailles reminds us of this. Cyberattacks, in particular by ransomware (programs that render the target’s files unreadable in order to extort a ransom) have become a top threat to businesses and public actors. So much so that insurers such as Zurich are beginning to deem this risk uninsurable.
It is true that cybercrime has become industrialized and computer cracks are no longer the only ones to be able to practice it: malicious people can easily buy kits that are so to speak “turnkey” (hacked access, attack software , money laundering services, etc. allowing attacks on individuals or companies. And the most active groups are sometimes organized like real companies “with HR, purchasing and training departments”, notes a recent report by Wavestone, a company specializing in cybersecurity.
Large companies are obviously the most targeted by hackers. One in two multinationals has already detected a ransomware attack within its supply chain, according to a study by Trend Micro Research. However, SMEs and ETIs are not immune to this scourge, and are often ill-prepared for it. “60% of SMEs affected by a cyberattack file for bankruptcy within six months,” recalled Hugues Foulon CEO of Orange Cyberdefense at the end of November. It is therefore not surprising that in the midst of the “tech winter”, start-ups specializing in cybersecurity still have no difficulty in raising funds.
Technology as a shield of Ukraine
The strategic role of digital has never been more visible than with the war in Ukraine. By moving all of its administrative files to the cloud, the Ukrainian state was able to preserve them and ensure access to them even in the event of a strike. In order to help his population, he brilliantly modified mobile applications like Diia (which allowed citizens to have digital versions of documents such as their driving license). “Since the outbreak of the war, we have adapted it to this reality and are constantly launching new services. For example, the possibility of donating to the army in a few clicks, obtaining digital documents for people who had to flee their homes without their papers, or to benefit from public financial aid via an application. The eVorog chatbot allows Ukrainians to report to our army the location of enemy troops”, confided to us last August Mykhaïlo Fedorov, the Minister Ukrainian Digital.
Elon Musk’s Starlink satellites are also providing essential help, restoring connectivity to areas where infrastructure has been pounded. And these constellations in low orbit not only serve as a safety net: they also allow the military to communicate faster, and to exchange more information, which is invaluable on the battlefield. The community of Ukrainian developers, whose talent in the software field is particularly renowned, also uses its technical knowledge to fight against the invader. The companies Ajax and Stfalcon have for example developed, in a few weeks, an application which alerts civilians when dangers are approaching (planes, mortar fire, ground combat, etc.).
And by August, more than 250,000 people had joined the IT Army, this “army” of volunteers to help the country’s cyber forces resist Russian cyberattacks. By continuing to work in sometimes extreme conditions, Ukrainian tech professionals finally have a major role: supporting Ukraine’s economy. “It is what allows our army to equip itself and our country to turn”, explained to L’Express last August Pavlo Kartashov, CEO of the Ukrainian Startup Fund (USF). Tech is indeed one of the few sectors not to be seriously disrupted by the destruction caused by the Russian attacks.
The metaverse comes back down to earth
Barely thrown into the air by Mark Zuckerberg, the concept of metaverse has aroused the curiosity of many industries (even Carrefour has wet a toe in it). Logical because immersive tools have always won the support of the public: as soon as it was possible to take and share photos thanks to smartphones, the public began to do so massively, the same with videos. For free social networks, whose model entirely financed by advertising shows its fragility, the metaverse would be a formidable monetization lever. “It would be possible to sell a wide variety of services in the metaverse, virtual land, NFTs, to take commissions on the transactions that take place there”, explained to us last November Julien Pillot, economist and teacher-researcher at the ‘Insec. The ugly avatars and the basic worlds shown by “Zuck” in 2022 have, however, made it possible to measure the distance – immense – that remains to be covered before wandering into seductive universes. Intel also estimates that it would take a computing power 1,000 times greater than what we currently have to offer metaverses close to what the founder of Facebook describes.
Strategic acquisitions could of course help the giants to take great strides forward in the field. But competition authorities around the world and in the United States in particular are showing their teeth. The takeover by Meta of a virtual reality fitness application is thus on hold. The case to watch closely, however, is the acquisition of Activision by Microsoft, also in the sights of the FTC. If the group wins its case and keeps hold of the popular video game publisher and its battalions of virtual world professionals, it will have placed its pawns very skilfully in the battle of the metaverse.
The crypto doldrums
Like the tech sector as a whole, the web3 and cryptocurrency sphere benefited from the period of very low rates. Investors bet on riskier stocks, fueling cryptocurrency speculation. Between January 2020 and the start of 2022, bitcoin went from 6,500 to 37,000 euros and a slew of wacky tokens emerged. But “what goes up does not come down”. In 2022, rising rates brought the crypto frenzy to a sudden halt and initiated a (healthy) purge of the sector. The weaknesses of certain projects have come to light. Doubtful practices too. And major players have fallen.
Do Kwon, creator of the Terra crypto ecosystem which collapsed in May, is now on the run, suspected of financial crimes and wanted by Interpol. Crypto lending platform Celsius went bankrupt last July. And the year ends with the violent crash of the FTX platform, and the arrest of its founder Sam Bankman-Fried, suspected of embezzlement. The prospects opened up by blockchain technologies are not closed (especially since major work is being carried out, particularly in the Ethereum ecosystem, to reduce their environmental impact). The question is how many more dominoes will fall.
The China/US war for technological supremacy
Donald Trump had put the Chinese digital sector on the grill, preventing its flagship Huawei from accessing American technologies. Joe Biden does not turn out to be more tender with him, quite the contrary. At the beginning of October, Washington announced the implementation of strict controls on the export of certain American products and software to Chinese entities. A stab that will seriously complicate the life of tech companies in the Middle Kingdom, especially in the strategic semiconductor industry.
Tensions between the two powers also crystallize around TikTok, the Chinese app that has won over young people around the world, especially in the United States. Artificial intelligence sorts, it is true, with formidable efficiency the videos likely to appeal to users according to their tastes, in order to retain their attention. Result: it garnered a billion users in five years, a feat that very few tech giants have achieved and that Facebook took twice as long to perform. The Chinese app is now in the sights of Washington, which sees it as an instrument of foreign influence and fears the use that Bytedance, its parent company, could make of the data collected. Asked by L’Express, FCC commissioner Brendan Carr is also calling for the banishment of the horn and cry app.