Few would argue that 2022 wound down in a rather tumultuous fashion for the tech world.
As Meta laid off more than 11,000 staff to combat its financial woes, Twitter began to undergo intense surgery at a quite astonishing rate following the takeover by Elon Musk.
Elsewhere, one of the world’s largest cryptocurrency exchanges suddenly collapsed, a record-breaking takeover attempt has been brought into doubt, and TikTok is fighting a bid to have it banned in the US.
And in another sign of politicians throwing their weight around, Apple has reluctantly accepted that the design of its flagship product is now subject to the whim of an EU directive.
But there will no doubt be more drama to come in the next 12 months.
The state of social media
Plenty of eyes will be on Twitter to see how the platform develops under its new owner’s already dramatic reign.
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“Views are up, but in the same way that people crowd to watch a burning building to watch it go down,” observed journalist and sci-fi author Cory Doctorow at Sky News’ Big Ideas Live event.
New features will likely come and go, more controversial accounts may return, and Musk’s “chainsaw” strategy could see the number of employees dwindle further.
Musk could also end up butting head with politicians, having been warned he could face EU sanctions for banning prominent journalists whose coverage he disproved of.
Various alternatives began to emerge towards the end of 2022 as some users sought pastures new, with the decentralised Mastodon the early front-runner – definitely one to keep an eye on this year.
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Of course, Twitter’s traditional rivals are still around, though looking rather battle-scarred.
Facebook and Instagram users may find themselves growing disgruntled if parent company Meta keeps batting its eyelashes towards the metaverse instead, as the once-almighty company continues to try to reinvent itself after a disastrous year for its stock prices.
And then there’s TikTok, which has grown to more than a billion users worldwide in perhaps the biggest threat to the dominance of Mark Zuckerberg’s platforms.
“So much of this is a battle for attention,” says Chris Kelly, Facebook’s former head of global public policy.
“There’s robust and wide open competition for user attention […] and that’s pretty exciting.”
But while TikTok threatens Meta, TikTok itself is being threatened with an outright ban in the US over what some politicians see as a national security risk from China.
Would the US really ban one of the world’s most popular apps? The coming year may give us the answer.
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Race to the metaverse
Zuckerberg’s aforementioned pivot to the metaverse represents an enormous gamble for a company that has lost more than half a trillion dollars in value since rebranding from Facebook to Meta.
“If he gets it right, he saves the company,” internet entrepreneur Amber Ghaddar told Sky News.
“If he gets it wrong, I think Facebook is going to be a lot of trouble.”
No pressure then, Mark.
Internet entrepreneur Amber Ghaddar is an entrepreneur focused on the potential of Web3, which is a term used to describe what the next incarnation of the internet might look like.
Whether a firm like Meta can adapt, she believes, depends on whether it can overcome its three biggest challenges: the economic climate, a desire for more user privacy, and competition which is focused on younger generations.
“In 2008, we had this huge financial crisis that led banks into quantitive easing, bringing rates to zero, so you had tonnes of money in the market,” she said.
“It was meant to trickle down to create activity and consumer inflation – it never happened. That money started flooding into venture capital firms, private equity firms, and public equity.
“Money was so cheap and so easy to invest, we created this inflation in asset prices – and a lot of it went into tech companies.
“Investors did not care much about the basics of finance, they cared about growth – so more users, more revenues.
“Now we have rates that are up, central banks tightening and access to money is more difficult – and investors are telling themselves ‘hang on a minute, I need to look at the bottom line’.
“Big tech has been used to crazy valuation – they need to restructure, focus on the bottom line.”
And that’s what makes the timing of Zuckerberg’s metaverse gamble quite so extraordinary.
Not that it’s all down to Meta and its focus on virtual reality when it comes to the metaverse.
What Meta is building should really be seen as a platform within the metaverse, although admittedly one with tens of billions of dollars being thrown at it, and there are other players in the space.
There are gaming behemoths like Fortnite, virtual spaces like Decentraland, and leading brands looking to sell you digital garments, souvenirs and other merchandise – all feeding into this idea of online spaces where our virtual selves become just as important as our actual selves.
The race to the metaverse has been hailed as “the race for the future of the internet” – and it’s going nowhere.
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Crypto under fire
A push for regulation is inevitable after the stunning collapse of FTX and arrest of its founder, charged with “one of the biggest financial frauds in American history”.
The downfall of Sam Bankman-Fried will no doubt inspire an Elizabeth Holmes-style media blitz, all while the industry where he made his name faces more scrutiny than ever.
Bipartisan legislation is in the offing in the US which would hold cryptocurrency firms to the same regulations as corporations and banks, while the Treasury is reportedly set to tighten the UK’s own rules too.
The recently appointed chair of the UK’s financial watchdog does not appear to be a fan of cryptocurrency, with a Financial Times report quoting him as describing crypto firms as “deliberately evasive” and suggested the sector facilitated money laundering.
Brian Armstrong, chief executive of crypto exchange Coinbase, told Sky’s Ian King the world’s financial hubs must improve their “crypto-specific regulation”, and it seems all but inevitable that we’ll see just that in 2023.
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The rapid ascent of AI
The internet had a new favourite toy by the end of 2022: ChatGPT.
San Francisco firm OpenAI’s new chatbot released to much fanfare, leaving users stunned by its ability to perform everything from recommending fixes for computer coding bugs to dinner recipes.
It even helped write a Sky News article.
But push it hard enough and its limitations become clearer, often offering overly verbose and surface-level answers reminiscent of someone blagging their way through a job interview.
By taking the world by storm overnight, though, it was a reminder of how quickly powerful new AIs are emerging.
“Inevitably there will be more robots in everybody’s life,” Stewart Miller, the head of the UK’s largest and most advanced robotics centre, told Sky News earlier this year.
“They’ll be helping you at home, when you go out shopping, when you go to a hotel, they’ll be involved in hospitality, when you go to a theatre, everything.”
Whether it’s ChatGPT taking a big step further towards genuine human intelligence, or something completely new emerging from elsewhere, AI is developing fast – and we need to keep up.
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A shake-up for the gaming industry
Microsoft spent much of 2022 trying to convince government regulators that it could be trusted to complete what stands to be the biggest takeover in tech history, as it tries to seal a $69bn (£56bn) deal to buy Activision.
The company behind the Xbox wants to bring the firm responsible for Call Of Duty under its wing, and has faced monstrously stubborn opposition from rival Sony, which says the move could one day see the blockbuster shooter franchise removed from its PlayStation consoles.
Regulators are taking notice, with the EU and UK competition watchdogs both conducting investigations – and the US’s going further by formally moving to block the deal.
While Microsoft and Activision remain confident of completing the deal, the FTC has set a hearing before an administrative law judge for August, so expect this one to rumble on.
Whatever the outcome, it will represent a major shake-up for an industry expected to welcome at least one major product launch in 2023, with PlayStation’s new VR headset on the way and persistent rumours of a long-awaited console update from Nintendo.
