by Larry Magid
This post first appeared in the Mercury News
This year wasn’t a good year for tech, but it was a momentous one. The tech-heavy Nasdaq, as of Wednesday, declined about 31% for the year, with Meta losing 65% of its value. Tesla was also a big loser, but even Apple and Google are worth substantially less now than they were last New Year’s eve.
It was in June of 2022 when Mark Zuckerberg changed the name of Facebook to Meta, signaling an all-in strategy to convert the company to “metaverse” products, like virtual reality and, someday, augmented reality. It was a big bet, which, so far, hasn’t paid off. Keep reading for my thoughts as to how things might shake out for Meta and the metaverse in 2023.
The biggest story of the year had to be Elon Musk’s acquisition of Twitter. Musk came in with guns blazing, firing nearly half the staff and either firing or accepting the resignations of key trust and safety staff. He also reinstated Donald Trump and many others who had been kicked off the service for such things as hate speech, incitement to violence and spreading false information about COVID or the results of the 2020 election. I started out 2022 as a member of Twitter’s Trust and Safety Council, but that came to an end on Dec. 12, when Twitter disbanded the council.
Crypto took a nose dive in 2022, capped off by a major scandal in November when crypto exchange FTX collapsed, resulting in the loss of more than $8 billion in assets.
There were some relatively significant legislative acts in 2022, including California’s Age-Appropriate Design Act, which set some much-needed rules on interactive services “likely to be accessed by children,” including tightening default privacy settings. The European Union passed the Digital Services Act, which, among other things, impacts content moderation and algorithmic accountability, intended to provide some transparency in the way automated systems impact what you see online.
Speaking of algorithms, one of the big stories in late 2022 is the emergence of ChatGPT. It’s a chat bot that answers questions but rather than hear about it from me, I asked ChatGPT to tell me “what are you?” It responded, “I am an artificial intelligence assistant trained to help answer questions and provide information on a wide range of topics,” It went on, “my primary function is to provide accurate and helpful information to help users learn more about the world around them or solve problems they might be facing. I am here to help, so please feel free to ask me any questions you have.”
I put it to the test, and it’s almost scary. It does get things wrong, but it often gets them right or at least mostly right, and it can even do things like “write me a story (or a poem) about a boy named Dylan and his dog Shaggy.” If you haven’t tried it, you really should by going to openai.com/blog/chatgpt. You can even use it to get explanations of medical conditions, though you should never rely on medical information you find online without consulting a doctor. And I’m not just saying this to cover myself. I truly mean it based on my own experience, including needless worry from information that I didn’t know how to properly interpret.
Looking ahead to 2023
I rebooted my crystal ball, and it gave me an admittedly cloudy picture of what to expect. It said that 2023 will continue to be a challenging year for tech, with likely more cutbacks at least in the early part of the year. It also said that the long-term outlook for tech is good, but it refused to tell me when things will turn around.
My crystal ball also said it will be an important year for the so-called metaverse. Although nothing is certain, rumor has it that Apple will introduce an augmented reality product in 2023, perhaps in the form of glasses and perhaps costing upwards of $3,000. It might be an impressive product that puts a lot of pressure on Meta when it’s compared with Meta’s relatively clunky Quest headsets. But despite lots of rumors, Apple remains highly secretive, and you never know for sure what they’ll announce until they announce it.
Meta isn’t standing still. It will almost certainly iterate on its virtual reality products and may come out with something that competes favorably with Apple. Meta has already confirmed that it will release a new virtual reality headset that’s better than its $499 Quest 2 and substantially less expensive than its $1,500 Quest Pro. “There will be a Quest 3 and that’s in the price range of $300, $400, or $500,” Zuckerberg told Stratechery.
Although I’m looking forward to seeing what metaverse product emerge in 2023, I’m only cautiously optimistic about this new paradigm. Being immersed into a 360 environment has its charms and even makes casual communications more lifelike, but I’ve learned to never bet on a technology until it I see how people vote with their dollars. It’s hard to forget all the hype about 3D TV, which, despite billions in investment from major TV brands, was never embraced by consumers.
Regulatory scrutiny
There is no doubt that regulators and legislators will be taking a very close look at the tech industry in 2023 though one never knows what, if any, legislation will actually pass a divided Congress. Whether they can agree on a solution, both parties agree that tech needs to be reined-in, though probably for different reasons. The Europeans will continue to regulate tech, probably more stringently than what we can expect in the U.S.
There will be lots of pressure on TikTok because of its Chinese ownership, but I doubt if it will be banned in the U.S. Whatever regulators may think, there are millions of young people, including many of voting age, who love the service and don’t want to see it go away. It’s possible that its Chinese owner, ByteDance, will sell it, but even if it doesn’t, I’m pretty sure TikTok will be part of the U.S. scene in 2023.
Uncertainty
I’m not sure what will happen with Twitter. Musk has said that he will step down as CEO, but for the foreseeable future, he will remain its owner. If the company continues to lose money at or above its current rate, Musk might decide to sell it at a loss, and that could be a good thing if it winds up in the hands of a responsible company. I’m not sure who the bidders might be, but Microsoft would be a good choice, and unlike Meta or Google, likely to pass regulatory muster.
As I said at the outset, my crystal ball is cloudy, so nothing about the future is certain except my wish that you and yours have a Happy New Year.
Disclosure: Larry Magid is CEO of ConnectSafely which has received financial support or ad support from Meta, Google and other companies mentioned in this column.