Big Tech Will Get Back to Real Tech in 2023

What to Expect 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 reprioritize 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 emphasize 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 pipe 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.