A first step towards the Metaverse?
And also: (1) uncertainty on post-COVID recovery benefits digital disruptors; (2) regional tech giants emerge; (3) the debate about investing in China; (4) regulators disrupt tech business models
1. Consumer behavior and associated risks
What is happening
The time frame for the post-pandemic world is still very uncertain, and markets are reflecting this (WSJ)
Companies hesitate to require employees to work from the office. Microsoft has delayed a full re-opening to an “undetermined future date” (NYTimes)(WSJ)(FT)
Zoom is still often preferred to business travel (WSJ1)(WSJ2)
But some things might be starting to get back to normal:
Disney just announced they will release their next new films exclusively in theaters, after a big success with “Shang-Chi” (the latest Marvel release) (WSJ)(WSJ2)
Emerging risks:
New vulnerabilities to hackers: smart buildings… and our own brains (that make us “fall in the traps” (WSJ1)(WSJ2)
A new report on how TikTok uses “sex and drug videos” to capture minors’ attention (WSJ)
What it means
No one seems to know what will happen next with the virus. This could help sustain the acceleration of digital lives and businesses that came with the pandemic
At the same time, companies like Disney are experimenting with ”hybrid” digital-physical business models, e.g.: the new (shorter) exclusive release window for theaters
As we depend more on digital, cybersecurity risks keep increasing, and we may have to learn new behaviors if we want to be safe
Online safety also becoming a key priority, and this is creating more pressure on attention-centric business models (like TikTok’s)
2. Platforms and Digital Enablers
What is happening
We could be starting the age of “Regional Big Tech”:
Sea, an APAC leader in e-commerce and videogames, just raised $6bn, with a market cap of $174bn (Bloomberg1)(FT)(Bloomberg2)
Sberbank wants to be the Russian Amazon (FT)
AI: A new OpenAI technology (“Codex”) enables computers to write their own programs, in 12 languages (NYTimes)
Devices:
Facebook launches camera glasses with Ray-Ban, amid a noisy debate about privacy implications (FT)(WSJ)(NYTimes)(FT2)
Amazon will launch its own TV sets, trying to leverage Alexa and aiming to grow its video streaming market share (WSJ)
Cloud: Amazon, Microsoft and Google invest in Databricks, a data analytics startup that works across different clouds (WSJ)
Semiconductors: Intel will invest $95bn in European fabs (WSJ)
Digital payments: PayPal spends $2.7bn in a Japanese “buy now, pay later” provider (FT)(WSJ)(FT2)
Crypto currencies: El Salvador finally adopted bitcoin as a national currency, amid plenty of technological issues (WSJ)(FT)(Bloomberg)
What it means
Geo-politics are favoring the creation of Regional tech giants. Investors see an opportunity, but this could also be a threat to Big Tech’s growth perspectives
OpenAI continues to justify the “existential risk” concerns that they want to address. Now with an AI-based coding system. Programming jobs are not so safe
Facebook’s new glasses: just a wearable camera now, but could evolve into a future “metaverse” gateway, mixing digital and physical world features
Analytics asa cloud killer app. Databricks is a new example, after Snowflake
Europe wants to build its own chips, looking for tech “self-sufficiency” and Intel aims to capitalize that (including potential public subsidies)
3. Funding innovation
What is happening
A big debate about investments in China:
Blackrock raises $1bn for their Chinese mutual fund; (WSJ)(FT)
G Soros calls this investment a “tragic mistake”; (Bloomberg)(WSJ)
Ray Dalio agrees with Blackrock; (Bloomberg)
Meanwhile, Ark’s Cathie Wood agrees with Soros (FT)
Next Computing Platform:
A new wave of startups are focused on solving remote work (with VR features) (FT)
The hype of NFTs is seen as an anticipation to the “metaverse” (FT)
Cars: Ford hires an ex-Apple executive. Apple appoints a new person to lead its self-driving car project (WSJ)(FT)
Batteries:
Toyota plans to spend $9bn in electric-car battery plants (WSJ)
Big investors interested in companies building batteries for the power grid (WSJ)
A new disruptive battery emerges, powering a fitness tracker (Whoop) (NYTimes)
Space: Aerospace contractors investing to build space-based services (e.g.: Orbit Fab, a refueling platform) (WSJ)
Hacking aging: Several Silicon Valley startups are working to lengthen human lifespan. Money is flowing, as this started as a “billionaires’ dream” (FT)
What it means
After Didi’s IPO fiasco, uncertainty has massively increased for Western investors’ opportunities in China. Lack of projects elsewhere and previous exposure to China may explain why some voices are recommending to move ahead
The “metaverse” hype continues to grow, driving a new wave of startups, that target the emerging needs from remote work. Facebook is also working on that use case with its own employees
Batteries confirmed as a big theme for investors, looking beyond electric car suppliers and into the power grid
Expanding lifespan could turn into a priority area for biotech startups, pushed by billionaires that don’t like getting old
4. Building new rules for the (digital game)
What is happening
Customer protection: privacy & safety:
Tencent and NetEase penalized by government’s pressure to “end profit focus” in videogames (FT)
Texas and Brazil forbid social networks to remove people’s posts, limiting content moderation (NYTimes1)(NYTimes2)
Antitrust:
Apple’s case vs. Epic Games for the App Store ends with a “mixed verdict”, but many people believes that this will change smartphone app distribution forever, and Apple risks “losing billions of dollars annually”. (WSJ1)(WSJ2)(FT)(Bloomberg)
An open discussion is the impact on customer experience (WSJ)
South Korea targets local tech firms. Kakao suffers losses (Bloomberg1)(Bloomberg2)
Tech geo-strategy:
Will China be a “digital dictatorship”? Several analysis appear this week, speculating where the Chinese regime is going, including the role of technology (FT1)(FT2)
What it means
Regulators across the world are moving to address online safety concerns, targetingbusiness models that incentivize companies to stimulate consumers’ addiction (e.g.:China with games this week), or regulating the approach to fake news and political polarization (Texas and Brazil this week). This could lead to disruption on the “incumbent” ways to make money at the internet (e.g.: attention / advertising)
App store economics could also change significantly after the verdict of the Apple vs. EpicGames case this week, which denies the right to offer app downloads from out of the App Store, but requires the option to do payments bypassing Apple