Twitter, Facebook, Google and Amazon... the tech giants are on the brink of collapse

Translation introduction:

In light of the bankruptcy of Silicon Valley Bank announced hours ago, it seems that the most prominent global technology stronghold is facing a crisis linked to the violent global economic shifts in recent years.

However, what happened yesterday was not the first crisis faced by Silicon Valley. The past year witnessed a huge wave of dismissals in the technology sector in the United States, especially among major companies such as Google, Facebook, Amazon and Apple, which was discussed by "Brian Merchant", a writer and author specializing in Technology, environment and labor issues files, in a report published by the American "Atlantic" magazine.

Translation text:

With the tragic multidimensional implosion of Meta, the express train crash of Elon Musk's Twitter, and the witnessed workers' uprising against Amazon;

Not only was the past year an exceptionally catastrophic year for the largest American technology companies, but it was a year of settling scores for all.

The tech giants who have shaped our lives online and in real life over the course of the 21st century have ended up on a wall. Amazon, Alphabet, Microsoft, Meta, and Apple have all seen their market capitalization drop to Sometimes it collapsed, and many of them reduced their workforce, with at least 120,000 employees losing their jobs last year.

The myth of the genius founder, which for a long time prevented many of these giants from being criticized, was shattered before our eyes.

Launched with the promise of connecting the world, thinking differently, making information available to all, and achieving technological democratization, these companies have spent most of the past decade taking the same steps that big corporations have taken throughout history in pursuit of greater growth, such as favoring profit. On safety, market expansion at the expense of the integrity of the products and services it provides, and increasing financial return at the expense of innovation.

However, it has taken those steps on a much larger scale, at a faster pace, and with more impact.

Silicon Valley, now ruled by monopolistic corporations, tainted by exploitative labor relations, and overly reliant on precarious employment, appears to be rapidly spiraling into a dead end.

Everyone can "feel" what's going on these days in Silicon Valley from the weight of stagnation accumulated in the technologies that most of us encounter every day.

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Some of the most powerful, profitable, and expanding companies in human history, linked at least formally to various innovations, have recently stumbled, failing miserably to create the future they have long portrayed in their propaganda, or even to preserve the worlds they have already created.

Having reached that gigantic size, they are no longer able or willing to manage the digital communities they have built.

These companies are paralyzed in the development of their products, and they have reduced their activities to be limited to monopolistic practices such as charging money for subscriptions, and imitating or buying small competitors.

As a result, antitrust judicial investigations seem to be on the horizon, as the policies of the major Silicon Valley companies no longer satisfy anyone, and there is even a consensus that hatred of major technology companies has effectively become one of the issues agreed upon between the Democratic and Republican parties in the United States.

Everyone can "feel" what's going on these days in Silicon Valley from the weight of stagnation accumulated in the technologies that most of us encounter every day.

We're scrolling down to the same silly ad, peering at the same bad news, on the same phone screen, on the same social network. This is the inescapable future.

There is a sense that we have reached the end of the Internet, and no one wants to bear the responsibility alone.

How these companies respond to this turbulent new era has major implications.

So, in 2020, we were bombarded with a mixture of virtual and augmented reality projects, and "metaverse" concepts.

It is not surprising that the technology giants, who oversee electronic societies today with their unhealthy features, are determined to impose them on us.

It is also not surprising that there is growing dissatisfaction among some tech tycoons who believe their visions have been blocked, while others have begun to jump the boat altogether, leaving a huge void in electronic infrastructure open for capture and further confusion in Silicon Valley.

Social media crisis

The major social networks are floundering, and there is little incentive to pick them up.

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Twitter, of course, is the clearest example of the tech companies' malaise, from Elon Musk's exaggerated bid to buy the company for a price that quickly doubled over the "weed joke" he tweeted on the site, to his disastrous management as CEO.

Musk and his tampering with that social network was the most-followed tech epic of 2022. By last November, Musk had laid off half the staff and reactivated banned accounts for some of the platform's most controversial users, including neo-Nazi Andrew Anglin and the president. Former American "Donald Trump", Musk also took advantage of his new status to promote far-right plots and suspend the accounts of some journalists.

Advertisers have expressed their disapproval of Musk's policies by stopping their spending and advertising on Twitter, and popular users have tweeted farewell to the platform.

However, this ongoing drama of Musk and Twitter should not overshadow the circumstances that allowed it to explode in the first place, as the platform's development process has stalled for a long time, and it has faced difficulties in including more users, and keeping the platform free of harmful content, abusive accounts, and information. Misleading.

Twitter is commonly used among certain groups of people, especially comedians, journalists and politicians, but it has not generated profits since 2019, and even then profits were scarce, as the platform recorded a financial loss in eight out of the last ten years.

Twitter has long presented itself as an essential online public domain.

And if this is the case, then why did the Twitter board of directors rush to hand over the platform to such a ghoul, who sometimes unleashed harmful and malicious tweets?

The answer is equally simple and cynical, Brett Taylor, Twitter's independent chairman, said in a press release: "The amount offered will provide exceptional cash, and we believe this is the best path forward for Twitter equity holders."

The owners of the money realized the signs of danger, and they seized what they could from the platform at its critical moments. They knew the truth about the chaos that Twitter was experiencing at the time, and they may have had the feeling, which many of us have, that the age of social communication may be nearing its end altogether.

Twitter has been plagued by bugs for a long time.

Last August, Peter Zatko, the platform's former head of information security, filed a corruption complaint alleging major vulnerabilities in the company, describing the security culture as so lax that any employee of the company at any time could access an account. A member of the US Senate without much oversight.

Zatko also claimed that foreign intelligence agents could easily penetrate the inner ranks of Twitter, and they did.

And Zatko blamed Twitter executives for prioritizing profit over security, and according to him, "risks and crises are what managed the company's helm, rather than being controlled by the company."

These leaks brought to mind the same that destroyed “Facebook” the previous year, when it was alleged that “Francis Hogan”

The big social networks are floundering, and the incentive to get them out of the way is slim. It requires investing generously in content moderators, empowering trust and safety teams, and criminalizing fast-spreading malicious content that drives massive traffic to platforms.

Instead, under Musk's administration, Twitter preferred not to implement any policy to counter misinformation regarding the "Covid-19" epidemic, and Facebook's verification system provided a cover for high-level users to protect them from content censorship. Instead of developing and implementing strict policies to address the problem of harmful content Harassment and enhancing the security of users; the administrations of these networks chose to ignore the problems from the ground up.As for "Jack Dorsey", the founder of Twitter, he resigned from his position as CEO of the company in the fall of 2021, then left the entire company's board of directors in the spring of last year.

Meanwhile, Mark Zuckerberg, the CEO of Meta, apparently became so disillusioned that he decided to try to invent a new reality and drag us all there.

For example, when Meta held its Connect conference last October to showcase its progress on the Metaverse project, the stars of the show were "legs."

That clip alone quickly became comical shorthand for the whole event, as Meta's extraordinary achievement after a year and $15 billion spent trying to build the Metaverse is that those cartoonish, bland emoji now have blotchy limbs, too.

(Subsequent sarcasm was sharp when it became clear that Mita had faked even those legs that appeared in the show.)

Still, the buzz around the event did what the company wanted and what Metaverse was designed for in the first place: distract us from the fact that Facebook's user growth is slowing, that the platform is losing users to TikTok, and that it's mired in controversy over its management. Content and definition of what is offensive and acceptable content.

As the days pass, the ambitions of Facebook's "Metaverse" turn out to be a fantasy, and an attempt by the embattled CEO to escape into a virtual 3D world to which he can leave, leaving behind the tragedy of the boring 2D version of Facebook.

The company lost hundreds of billions of dollars in value last year and laid off more than 11,000 employees, or 13% of its staff, last November.

Social networking sites are in decline, and some of them have already ended or face a worse fate, but social communication is not the only one facing the crisis.

Google, Amazon and Apple are fighting for survival

Google, Amazon and Apple are experiencing hiccups in their monopolistic growth.

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Last September, when Apple held its annual iPhone launch event, many were not surprised when they found that the latest versions of the iPhone were almost identical to previous versions.

Weeks earlier, reports emerged that the US Department of Justice was considering filing a comprehensive antitrust lawsuit against the tech giant, Apple, for anti-competitive practices.

With the stability of the huge sales numbers for the iPhone, and the company's business shifting away from its previous dynamism (the company has not launched a new product of its kind since launching the "AirPods" in 2016);

Apple started relying on advertising.

Apple has begun allowing companies to purchase ad space on its storefront.

Last October, reports emerged that Apple was considering the possibility of displaying ads on its streaming service, TV Plus.

According to Wired, "Apple has now become an advertising company."

Meanwhile, Apple is putting enormous pressure on developers who rely on its store to publish their applications in order to extract from them the largest possible profit value, which made it reap profits by a staggering 78% margin in 2019.

However, Apple is not the only one experiencing stumbles in its monopolistic growth.

Google is still the largest advertising company in the world, and 60% of its revenue comes from appearing in search listings after someone searches on Google for a product or service.

It also reaps profits from YouTube ads and the cloud business services it provides, although the rules for these services have not changed a decade ago.

But with the consolidation of its monopolistic work, the quality of Google's most famous basic product (the search engine) has deteriorated, and the search results pages are filled with advertisements that the user must go through before finding the "authentic" results related to what he wants, so that Internet users are delighted recently by sharing reports that It indicates that young users have switched to the “Tik Tok” and “Instagram” platforms instead of Google in searching for various topics.

Like Apple, Google's main product witnessed stable revenues for a while, until the company's actions became more like a monopolistic entity swallowing up the world's companies, and farther from the technical innovation company model it claims.

The company has used its influence to secure its dominance in the digital advertising market, and has gone further: the pursuit of huge profits through its own store, Google Play, and by expanding its cloud services.

The result is that Google is also facing antitrust lawsuits from the Department of Justice, which is not surprising given that it owns the most dominant products globally: the Google search engine, the Chrome web browser, and the Android mobile operating system.

Google's pursuit of new revenue streams has taken it where many once-perfect tech giants have ended up: the US Department of Defense.

Keep in mind that Amazon gets most of its revenue from cloud business services provided by Amazon Web Services (AWS).

Despite Amazon's huge size and footprint in e-commerce, its profit margin in the retail trade is small, as the company recorded a loss in the fourth quarter of last year.

Amazon expanded aggressively on the back of profits from AWS services, lower prices for consumers, and what amounted to systematic labor exploitation.

But now, as its workers rise up in increasing numbers across the United States and seek to unionize, the formula on which the company relied is in jeopardy.

It is not surprising that the company opposes the creation of an “Amazon Workers Union” and continues to contest the outcome of the historic vote of its warehouse workers, a vote to form a labor union that took place last April in the shipping warehouse in Staten Island in New York City.

In addition, some of Amazon's most popular projects and products hit a wall in 2022. In March, we learned that prototype Amazon delivery drones were constantly failing flight tests, and one of the drones even started a forest fire in Oregon.

As for “Alexa”, Amazon’s widespread virtual assistant, it seems that it is losing billions of dollars every quarter of the fiscal year, a loss that prompted a former employee to consider it a “fierce failure”, in addition to that the Alexa department received the lion’s share of the company’s layoffs of thousands of employees during last fall.

(The Amazon CEO has announced that there will be more layoffs this year.)

In addition to Amazon leasing more of its web infrastructure, its way to permanently expand its profits is to open more shipping and distribution warehouses, and to make employees do their best until the last breath using complex and punitive systems to monitor workers and monitor their productivity, a proposition that stands in Facing the rising labor movement, the difficult employment market, but also standing in the face of public opinion that supports the unionization trend in Amazon with overwhelming levels of support.

Is the age of the Internet as we know it over?

The crisis is not limited to the giant technology companies, but rather to the model that emerged from it, in which millions of dollars are assigned to a dreamer in order to invent a new future without supervision of what he implements on the ground.

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What a bleak result that the Internet produced when it was believed that there were endless possibilities, and users were promised an endless spectrum of tools to enjoy innovation, build cohesive communities, and find their best expression, even when they were unable to do so in real life.

The tech giants, in fact, didn't base their business model on making any of that available, even though their ads and slogans said otherwise.

Instead, companies' ambitions have always focused on becoming the biggest: to have the most users, sell the most devices, and keep the most people in their gardens and isolated social world.

The stumbling block that we are currently witnessing is a result of the overwhelming success of some of the most ambitious companies of our generation, but without having any vision beyond that moment, as they do not have any serious interest in linking the civil and social dimensions within their projects.

So it is logical that Elon Musk would dominate the conversation around the technology sector, at the exact moment that the sector openly breaks its promises.

Silicon Valley has always been based on the myth of the hero founder, and no one was shrouded in this myth more than Musk, until last year he witnessed the moment that myth was shattered.

Musk was once a real inspiration that made him compared to the movie character "Iron Man". Many believed in him to be a superhero capable of inventing electric cars, sending rockets to Mars, and bringing the future to us.

But now, Musk has turned into the stubborn and failed tech giant, a man who is obscenely rich and incredibly powerful, yet he is stuck in the mud, amplifies sedition and poisonous atmosphere, and stands on the cusp of entering an endless stagnation.

Or take, for example, Elizabeth Holmes, whose company, Theranos, was valued at $1 billion without being floated on the stock exchange, and was the pearl of Silicon Valley, until Holmes was sentenced last November to more than 11 years in prison for defrauding investors. Regarding the nature of the technology that Theranos is creating, it did not work as the company claimed.

Then there's Sam Bankman-Fred, the young crypto genius and Democratic champion of influencers, who promises to usher in the age of cryptocurrency with his creation of the FTX exchange, and to improve the lives of people everywhere in the future. .

He ended up filing for bankruptcy at the end of last year, was out of detention on bail, and was charged with several other fraud charges.

Consumers may never get back the money they entrusted to the crashing Bankman-Fred exchange.

An irony of the end of last year is that the latest trend in this bustling sector is machine-generated images and text by AI.

Tools such as DALL-E and Chat GPT, pioneered by Open AI, use massive neural networks to compile new-looking output from huge amounts of data. The old data that was wiped from the internet and left at the disposal of the tech giants is images, articles and posts made to fuel the next generation of proprietary internet platforms.

Chat GPT (Getty Images)

It is revealing to know who are the most enthusiastic about such tools, the founders and the investors in them.

While some of these artificially generated images have gone viral;

In fact, there was much weariness and opposition from active artists and illustrators.

And no matter how bizarre this is, it seems only a matter of time before the giants of these platforms start buying, cloning, or turning it into a service with an exorbitant subscription that will soon hit hard on the creators and programmers of these original materials.

Once again, Silicon Valley is showing its willingness to eat itself.

The creators of artificial intelligence at the tech giants seem to be adamant, in the light of the Internet we have corrupted in their eyes, that there is some new "something" that should be offered to everyone, that we can all use.

But they should not trust their opinion so much.

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This article is translated from The Atlantic and does not necessarily reflect Meydan's website.

Translation: Hadeer Abdel Azim.