🌏 #7 | Tech and economics in 2023: 10 big stories
A wrap-up of 10 big stories in tech and economics that gripped me in 2023:
1️⃣ Generative AI
Undoubtedly, the biggest story in tech was generative AI, precipitated by the launch of OpenAI’s ChatGPT in November last year. The chatbot reached 100M monthly users in two months and kicked off some $69B in investment in AI startups in 2023 by both VCs and big tech.
2️⃣ Tech layoffs
If generative AI was marked by exuberance, the rest of the tech ecosystem wasn’t so lucky, with reported tech worker layoffs reaching 260K, up 57% from 2022. This was led by Alphabet, Microsoft, Meta and Amazon which each shed 10K or more workers.
3️⃣ The GPU shortage
On the software side, generative AI is powered by large-language models (LLMs). On the hardware side, it’s powered by GPUs, predominantly those designed by microchip giant NVIDIA. Given the interest in generative AI, demand for GPUs has far outstripped supply.
4️⃣ Regulators v. big tech
Tech regulators struck back in 2023. Both Google and Amazon found themselves embroiled in antitrust lawsuits initiated by the US FTC and the EU. The former also lost its Google Play Store antitrust lawsuit against Fortnite-maker Epic Games. And regulators blocked Adobe’s $20B acquisition of UI-design-tool-maker Figma.
5️⃣ Interest rates
Interest rates continued to increase, but at a slower pace than in 2022, increasing from 3.1% to 4.35% in Australia and from a target of 4.25%-4.5% to 5.25%-5.5% in the US. Generative AI aside, this was felt as belt tightening in tech.
6️⃣ Inflation
Similarly, inflation eased from its peak in 2022, but remains high. In Australia, It decelerated from a year-on-year peak of 7.8% in Q4 2022 to 5.4% in Q3 2023. In the US, the peak was 8.6% in Q2 2022 and 3.5% in Q3 2023.
7️⃣ Migration
Post-Covid, Australia experienced “catch up” migration, with net migration in the year ending (YE) Q2 2023 estimated to have reached 518K, more than double 204K in YE Q2 2022, about the pre-Covid level. The UK story is similar.
8️⃣ Geopolitical conflict
Unfortunately, 2023 saw the continuation of the Russia-Ukraine war and the start of the Israel-Hamas war. From an economic perspective, this has seen increased focus on foreign aid and defence budgets, as well as heightened international trade uncertainty.
9️⃣ Climate action
This year saw the mobilisation of industry — and all the complexity that entails — in response to climate ambitions that grew during the Covid years and were enshrined in legislation such as 2022’s Climate Change Act in Australia and the Inflation Reduction Act in the US.
🔟 The soft landing
With inflation having eased, the pace of interest rate hikes slowing and unemployment remaining low despite upwards pressure at 3.9% in Australia in November, 3.7% in the US in November and 4.2% in the UK in Q2, there are signs of the elusive soft landing.
🎄 Happy holidays!
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