Dec 14, 2022 - Technology

Tech's year of big endings

Illustration of a gravestone shaped like a cursor

Illustration: Sarah Grillo/Axios

The big noise in tech this year was the sound of trends dying and eras concluding.

The big picture: Tech's 20-year run of mad growth, fueled for much of that time by easy money, came to a crashing halt in 2022 as the Federal Reserve raised interest rates to fight inflation.

  • That left large tech companies scrambling to lay off workers and startups desperately hoarding their remaining cash. The industry hadn't seen anything like this since the turn-of-the-millennium's dotcom bust.

The era of social media seemed to expire in front of our eyes, too.

  • TikTok's dominance among younger users suggested an online future focused less on one's personal network and more on content selected by a fiendishly efficient algorithm to snare your attention.
  • Facebook, now Meta, doubled down on a 3D metaverse future and restructured its news feed to be more like TikTok.
  • Twitter sold itself to Elon Musk. As he fired more than half the company's staff, many users held premature death vigils for a service they feared would abruptly crash — but Twitter's end is more likely to come via a long, slow decline.

The techlash's final throes also played out in 2022.

  • A long-term effort by the U.S. government to rein in tech's giants started with thunderous Hill hearings and cries of "Break up Facebook!" five years ago and ended in legislative paralysis, with Congress failing to pass any significant new laws curtailing the tech industry's power.
  • Fear of government action has probably checked some further consolidations of power by Google, Apple, Amazon, Meta and Microsoft. But regulatory lawsuits are slow and uncertain, and the companies' war chests easily absorbed even hefty fines and legal fees.
  • The states and the Supreme Court could still make life hard for these giants. But overall, tech's leaders continue to worry less about government action than about the rise of new competitors and mass changes in user behavior.

The cryptocurrency boom was another big tech trend that 2022 halted in its tracks.

  • Crypto's "winter" began with the market collapse last spring and deepened with the implosion of FTX in the fall.
  • Bitcoin believers and blockchain enthusiasts still predict that another spring awaits this technology, but many observers see only more ruin ahead.

Of note: In this environment, even bedrock internet institutions suddenly look vulnerable.

  • Some saw a threat to the dominance of Google search in the rise of OpenAI's ChatGPT bot.
  • ChatGPT, some observers argued, could replace the venerable search engine by answering users' questions more fluidly — if less accurately.

Yes, but: In this year of endings, some key dimensions of tech held firm.

  • The smartphone era may be mature, and some visionaries dream of what might replace it. But the phone remains our universal interface to the digital realm — and an essential tool for living.
  • Getting and staying connected to the network continues to be a prerequisite for doing almost anything. Even in remote wildernesses, Apple is promising your newest-model iPhone can tap a satellite to summon help.

What's next: With so many final chapters being drafted around us, it can be hard to spy new beginnings.

  • Many of tech's possible next chapters — like connected VR worlds and AR overlays and quantum-computing breakthroughs — will take time to unfold.
  • Tech's most-likely-to-explode-soon bet is on AI, where widely available services to analyze data and generate content keep improving at astonishing rates.
  • Be smart: The biggest companies still employ many of the best AI researchers and control the biggest pools of data to train their models.

The bottom line: The pandemic temporarily ballooned growth estimates for companies providing remote access and on-demand services, and 2022 forced many of them to make painful cuts.

  • But the COVID era taught the industry a lesson that still holds: While the tech economy may be an endless boom-bust cycle, the curve of change driven by computing and digital communications just keeps ascending.
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