Today’s business headlines point to a harsh reality for Big Tech: Twitter uproar; collapse at Meta; Alphabet atrophy; adjustments at Amazon. Layoffs, falling inventories and falling valuations are the hallmarks of the moment.
The Big Tech malaise is unfolding before our eyes.
While the tech slowdown hasn’t been unexpected, it’s not entirely unwelcome.
Some might even consider it a relief.
No one – not even investors – seems to shed tears for the tech sector.
After a decades-long bull run, now comes decline, disruption, denouement. After all, irrational exuberance can only last for a while.
Investment analysts issue cautionary advice. S&P large-cap stocks are reassured that they will not be alone during the recession. Misery loves company.
Congress, the FTC and the DOJ have had Big Tech titans in their sights for years but have been unable to pull the trigger.
The tide may be turning.
Comeuppance in Washington may be slow, but it is happening. A new Congress will certainly focus on the well-documented missteps of Amazon, Google, Meta, and Twitter, to begin with. It would be a redux with a dash of House Republican fervor.
Tired of its failure to protect our data and respect our privacy, we may be better off for Big Tech’s downfall. Ecclesiastes reminds us that there is a time and a season for everything. For Tech, the retribution has been a long time coming.
For many, Big Tech has become unbearable, leveraging its largesse to thwart legislation, regulation and reform. Believing the federal government to be irresponsible, Silicon Valley has been oblivious to Washington conventions. Its posture of enlightened elitism, self-righteousness and undeserved exceptionalism has permeated Washington for years. Again, this may be coming to an end.
The recent decline in Big Tech stocks and the shrinking of its executives provide a good time to pause.
This may be a watershed moment for the country, as social, economic and security concerns are examined from new angles.
Policy makers can be deliberate rather than timid when addressing the full spectrum of technology policy issues. Their former deference to industry dictates can now be reviewed and reversed.
Taken together, these developments are all good, not only for Americans but also for the world. They enable the industry to re-equip for today’s economic realities – and recalibrate their C-suite leadership for tomorrow’s workforce.
Of course, losing money is never a good thing for investors, whether retail or institutional. Many 401k funds have shrunk before our eyes. But the stock price is just one indicator of the problems besetting Tech. Although the larger societal problems are more ephemeral, they cannot be ignored. Political speech and child protection are notable issues, as are privacy, cybersecurity and industry discrimination.
This is evidenced by Elon Musk’s content moderation advice – a noble notion but difficult to implement fairly and effectively. And Meta’s morale issues are no longer a secret on campus among those in the know. All of this needs to be dealt with, and soon.
Clear sight will allow us to take Big Tech for what it is – warts and all. Although it has transformed the modern global economy, it is no longer the keystone of outsized growth. Its social impact – both good and bad – cannot be questioned, but its unchallenged economic dominance should be.
With the resurgence of energy and transportation stocks, some are questioning the viability of big tech companies as medium-term growth engines.
While rumors of Tech’s demise may be premature, it’s not too early to chart a more responsible course for the future, including genuine cooperation with European and US regulators on the issues that matter most. .
We could all be better off for the downfall of Big Tech – if only for the reason that it forces us to question what has become convention.
Adonis Hoffman is CEO of The Advisory Board, Inc. He is a former Chief of Staff and Senior Legal Counsel at the FCC and has held legal and policy positions in the United States House of Representatives. He was also an adjunct professor at Georgetown University.