From ChatGPT to the Fall of SVB: A Review of the Most Significant Tech Events in 2023.

There is no doubt that 2023 will primarily be remembered as the year of generative artificial intelligence, with Sam Altman and his OpenAI being the main figure of this year, having generated more interest with ChatGPT than any other application ever, reaching millions of users in less than a week. The application of generative artificial intelligence has sparked both excitement and fear about what the future holds and whether artificial intelligence will cost us all our jobs. Nevertheless, OpenAI’s fame has prompted tech giants to increasingly move towards artificial intelligence.

Aside from the development of artificial intelligence, what else has happened in the tech sector over the past 12 months?

The Fall of SVB

Although we may have already forgotten about it, on March 10, Silicon Valley Bank (SVB), the 16th largest bank in the U.S. and a financial lifeline for many tech companies, collapsed. This event shook the tech sector, just as it did the banking sector, leaving lasting consequences for companies and employees. Recall that SVB’s shares began to plummet sharply after the bank announced their sale of $2.25 billion to strengthen its finances.

SVB’s shares recorded the largest single-day drop in history, falling by more than 60 percent and losing another 20 percent in after-hours trading. The company initiated the stock sale after losing about $1.8 billion when it liquidated part of its portfolio, primarily U.S. government bonds. This alarmed investors who recognized deeper issues at SVB, leading them to withdraw money en masse from the bank, ultimately resulting in bankruptcy.

This is the second largest bankruptcy in the U.S., following the collapse of Washington Mutual during the financial crisis of 2008, which closed with $307 billion in assets and $188 billion in deposits. However, SVB’s collapse was a greater shock than Washington Mutual’s, which had raised concerns for months prior. SVB, on the other hand, appeared to be a stable financial institution trusted by many venture capitalists. Additionally, in recent years, specifically in 2020 and 2021, no bank failed in the U.S. banking system.

The Departure of the Most Famous Bird

In July, a significant rebranding for Twitter arrived; its recognizable blue bird and the name ‘Twitter’ no longer exist, and the once most famous social network is now called X. This move sparked considerable debate, with some users embracing the change as a symbol of innovation while others criticized it as unnecessary and confusing.

Under Elon Musk’s leadership, Twitter implemented several policy changes in 2023, such as allowing greater freedom of speech and expression, which led to increased hate speech, misinformation, and harassment on the platform, the payment for blue checkmarks, and changes to the API, which many condemned as a step towards stifling innovation and limiting the ability to create useful tools for the platform.

Simply put, Elon Musk’s leadership and personality have been at the center of the controversy surrounding Twitter, or X, this year, and his controversial posts, statements, and business decisions have sparked significant debates both within and outside the X community.

The platform currently faces challenges in maintaining user trust and balancing content moderation. Furthermore, the platform needs to develop a profitable business model that does not rely solely on advertising, which could further encourage the spread of misinformation. In any case, the future of X remains uncertain.

Mass Layoffs

Just a few days after the start of 2023, the American e-commerce giant, Amazon, laid off more than 18,000 employees. The layoffs primarily affected the e-commerce departments and the human resources department, and the company had already begun laying off employees in the devices department back in November of the previous year.

Alongside Amazon, employees were also laid off by Meta, Microsoft, Alphabet, IBM, and Twitter, or X. Additionally, the streaming platform Spotify laid off over two thousand employees this year, with the main reason being cost reduction.

A total of 1,167 tech companies have eliminated 259,703 jobs this year, according to Layoffs.fyi, which has tracked the industry. This is a 57 percent increase compared to last year.

Instead of spending on growth, companies have focused on faster product rollouts and increasing profits. Issues that were considered crucial while tech companies felt they were at the top, such as ethical product reviews and content moderation, are no longer deemed necessary.

Washington Against Beijing

The year has been marked by geopolitical conflicts, with some being openly fought, such as the war in Ukraine and the conflict between Israel and Hamas, while the U.S. government has taken a more subtle approach against China by halting chip shipments produced by Nvidia, Micron, and AMD to China, after which Beijing announced retaliation and tightened controls over the export of two key materials used in the production of computer chips.

As of August, special permits are also required for the export of gallium and germanium from China, which is the world’s largest producer of these metals used in semiconductors, communication, and military equipment, but are also crucial in products like solar panels. Semiconductors, which power everything from mobile phones to military equipment, are at the center of a bitter dispute between the two largest economies in the world, which will not be resolved quickly.

As we have written, the U.S. has taken all steps to limit China’s access to technology that it fears could be used for military purposes, such as chips used for supercomputers and artificial intelligence. However, the U.S. is not alone in this story, as Japan and the Netherlands have also joined in, announcing plans to restrict the export of the most advanced microchip technology. The Netherlands has done this due to its domestic equipment and chip manufacturer ASML, which is a key player in the global microchip supply chain.

The Rise of Cryptocurrencies

The total market capitalization of cryptocurrencies surged over $1.55 trillion at the beginning of this month, driven by extraordinary weekly gains of 14.5 percent for bitcoin and 11 percent for ethereum. This milestone, marking the highest level in 20 months, has propelled bitcoin to become the ninth largest tradable asset in the world, surpassing Meta’s market capitalization of $814 billion.

Cryptocurrencies have recovered this year after a tumultuous 2022, during which market declines and numerous scandals, including the collapse of FTX, one of the largest cryptocurrency exchanges in the world, and allegations against its CEO Sam Bankman-Fried for fraud, undermined the credibility of this type of asset.

In addition to the aforementioned events, it is important to note the U.S. government’s battle against TikTok, which they claim could threaten national security due to data sharing, the introduction of the Apple Vision Pro headset representing an advancement in virtual reality technology, Microsoft’s acquisition of Activision Blizzard, and European and American regulatory efforts to control the latest technologies. The year has certainly been interesting, and what the next one brings remains to be seen.