SNEAKO - January 11, 2023


SNEAKO Reacts To Why Big Tech Is Collapsing!


Episode Stats

Length

18 minutes

Words per Minute

210.47862

Word Count

3,949

Sentence Count

226

Hate Speech Sentences

5


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Silicon Valley was a billionaire factory with some of the most prolific billionaires building their names and their bank accounts on the back of big tech companies. But then the bubble popped and now the biggest names in Silicon Valley are seeing their revenue plummeting, with the stock value of almost every big tech company falling dramatically.

Transcript

Transcript generated with Whisper (turbo).
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
00:00:00.000 Why big tech is collapsing? Oh shit, there we go.
00:00:04.000 Bro, I miss watching with this exact way I wanted to watch right now.
00:00:06.140 Silicon Valley is in chaos.
00:00:07.760 Almost all of the major big tech companies are collapsing.
00:00:10.440 For example, Meta is worth over a trillion in 2021.
00:00:13.460 But just a year later, and their value has dropped by two thirds.
00:00:16.680 And the other giants aren't far behind.
00:00:18.340 Amazon, Meta, Twitter, Tesla, Netflix have all seen massive revenue drops.
00:00:22.120 Not rumble though! Rumble in the chat!
00:00:24.780 And the scale of these losses is unprecedented.
00:00:26.720 especially considering big tech has been so unstoppable for the last decade in fact revenues
00:00:31.120 and profits were skyrocketing silicon valley was a billionaire factory with some of the most
00:00:34.880 prolific billionaires building their names and their bank accounts on the back of big tech
00:00:38.200 companies bill gates elon musk jeff bezos mark zuckerberg jack dorsey all of them were created
00:00:42.940 by the massive tech boom of the last four decades but then the bubble popped and now the biggest
00:00:47.640 names in silicon valley are seeing their revenue plummet firing hundreds of thousands of employees
00:00:52.160 with the stock value of almost every big tech company falling dramatically which leads us to
00:00:56.420 the question, how did it get this bad so quickly? Well, you see, tech was a growing part of the
00:01:00.460 world's economy for years. Over the last decade, tech companies have only got larger and larger.
00:01:04.700 Now, of course, there were ups and downs. For example, the dot-com crash of the late 90s
00:01:08.340 proved the catastrophic consequences of overvaluing tech companies. However, over time,
00:01:12.400 the industry always picked up again. It was a measured climb at first, but soon people forgot
00:01:15.920 the mistakes of the past, and as the years rolled by and technology improved, the companies behind
00:01:19.840 it grew richer and richer. But there were massive problems on the horizon for Silicon Valley,
00:01:23.580 because the path wasn't all golden.
00:01:25.360 For example, companies like Uber have coasted on their potential,
00:01:28.360 hoovering up investments without a proper model for profitability.
00:01:31.480 The same can be said for Twitter.
00:01:32.820 And yet despite this, all of the giants of the industry
00:01:34.800 go to immense proportions on paper.
00:01:36.660 For example, in 2018, Meta surpassed $500 billion in net worth
00:01:40.700 and Amazon were closing in on a trillion.
00:01:42.720 But all of these companies had a similar problem.
00:01:44.740 They just weren't worth what people thought they were.
00:01:46.680 Their business models were shaky and in constant need of investment.
00:01:49.520 Or they just didn't make that much money to begin with.
00:01:51.480 Their margins were always incredibly tight.
00:01:53.580 And that's why almost all of these tech billionaires never look at the stock price.
00:01:56.820 That whole period is very interesting because the stock is not the company
00:02:00.560 and the company is not the stock.
00:02:02.260 And so as I watched the stock fall from 113 to 6,
00:02:06.920 I was also watching all of our internal business metrics.
00:02:10.040 Every single thing about the business was getting better and fast.
00:02:13.820 Because they believed as their technology spread into every aspect of the world,
00:02:16.980 companies would always ride the wave of future potential.
00:02:19.420 Their shaky business model just didn't appear to be an issue at this point.
00:02:22.160 All these big tech companies were gaining more and more power and it seemed like they were
00:02:25.580 untouchable because big tech had something invaluable, the eyeballs and data of the
00:02:29.660 entire world. You see, ever since they started putting in user data at the massive levels they
00:02:33.580 do now, social media companies were then further driven to maximize their engagement, keeping
00:02:37.960 people on their app for as long as possible, and often as possible became the most important thing,
00:02:42.380 which is why we're all so addicted to our phones and our laptops. It makes all of these big tech
00:02:48.020 companies billions of dollars allowing them to sell more and more ads and if anything is free
00:02:52.980 and this changed my mindset about a lot of things in the world if it's free then you're the product
00:02:57.160 social media is free besides if you're a bot who buys twitter blue of course i would never buy
00:03:01.240 twitter blue but it's all free so how are they gonna make money off of your brain off of selling
00:03:05.560 you products all the time off of tracking your data and shilling you fucking brooms if i said
00:03:09.580 the word broom five minutes ago that's how constantly advertising specifically for what
00:03:15.220 they know you're going to click on. If it's free, you're the product. So it's their incentive to
00:03:20.100 keep you as addicted as possible forever. And over time, these companies perfected this process
00:03:24.500 by manipulating psychology, making the app so addictive that the entire world couldn't live
00:03:28.840 without their smartphone. And during this process, they found out that anger and fear are some of the
00:03:32.620 best ways to keep people engaged. And so as the algorithms were fine-tuned for engagement, they
00:03:36.860 pushed more extreme, more provocative posts above everything else, putting them in front of
00:03:40.700 everyone's faces constantly, all while censoring any information that didn't fit into Silicon
00:03:45.440 Valley's political narrative. Which is why Twitter, Meta, and all these other companies
00:03:49.220 became the breeding ground for social media addiction, censorship, and hatred. And as time
00:03:53.300 went on, the cycle ramped up and the culture war worsened. And these changes in the online space
00:03:57.640 were reflected in the real world, leading to riots, unrest, and collapse. It didn't matter to the tech
00:04:01.920 companies though. In fact, this was in their interest. And instead of tackling the problems
00:04:07.560 that they had caused themselves with their algorithms,
00:04:09.680 companies start to then lean further on censorship,
00:04:12.080 suppressing all counter-opinions in the name of misinformation.
00:04:15.040 But this solution wouldn't...
00:04:16.100 Yep, this is why people are going to start to want to come to Rumble.
00:04:19.580 I think that debate I had about the vaccine with Zestiny
00:04:22.180 really helped because people...
00:04:24.240 You can't even entertain that conversation.
00:04:25.960 You can't even entertain the idea that the vaccine is killing people.
00:04:28.860 You have to say that on Rumble.
00:04:30.120 Work forever.
00:04:30.700 I got like five people's strikes just for them reacting to that debate.
00:04:34.040 I got medical misinformation strikes.
00:04:36.260 You fucking bots.
00:04:37.360 How does that feel?
00:04:37.920 That's why I got banned.
00:04:38.700 They're going to paint me as a violent massager.
00:04:39.940 I got banned for medical misinformation.
00:04:41.680 Companies were going to pay the cost for their meddling in public discourse.
00:04:44.580 However, for now, they had to deal with a much more conventional problem, competition.
00:04:47.980 Over the past decade, China has exploded into the technology industry.
00:04:51.760 Companies like Tencent, Huawei, and Bydance have been eating into the Western market share
00:04:55.560 on a global scale.
00:04:56.740 In fact, Tencent has made numerous takeovers of Western companies like Riot, Epic Games,
00:05:00.500 and even Ubisoft.
00:05:01.600 And through these moves, they've undermined Western dominance in the lucrative gaming
00:05:04.500 industry.
00:05:04.920 with China owning some of the most popular games today
00:05:07.080 like Fortnite and League of Legends.
00:05:08.860 China owns Fortnite and League of Legends?
00:05:11.420 I didn't know that Fortnite was CCP propaganda.
00:05:13.940 China's also taking over with things like TikTok
00:05:15.920 and Tencent's investments in Reddit and Discord.
00:05:18.500 And then Huawei attacked hardware manufacturers,
00:05:20.740 releasing cheaper alternatives
00:05:22.040 loaded with Chinese data collection technology.
00:05:24.540 Yeah, IOMI did the same, but to even greater effect.
00:05:26.980 Despite only being founded in 2010,
00:05:29.060 they've gained over 12% of the market already.
00:05:31.500 And ByteDance is probably the most sinister.
00:05:33.060 I mean, China was well aware of the disruptive powers of social media long before the West
00:05:36.480 had any idea, and they studied what the Western companies were doing with engagement and turned
00:05:40.420 it into an R form, with TikTok exploding in popularity by playing on Silicon Valley's
00:05:44.740 addictive business model.
00:05:45.980 And by learning from Silicon Valley's successes and mistakes, TikTok has grown by 400% every
00:05:50.540 single year, seizing Western social media companies' audiences from under their noses,
00:05:55.940 which is why almost every major app has now adopted TikTok's short video model.
00:05:59.940 and to put it plainly this is a targeted attack on silicon valley all these companies have incredibly
00:06:04.900 close relationships with the ccp youtube shorts is about to take off that's why another reason
00:06:09.140 to join the creativity kit is youtube shorts are going to start monetizing within three weeks so
00:06:12.820 you should start preparing for that everybody who clips it up for tiktok start preparing because the
00:06:16.180 monetization is going to destroy tiktok tiktok you don't monetize how many views you get but youtube
00:06:21.860 shorts bot tube shorts are about to take over three weeks start preparing p which has given
00:06:26.180 given them enormous room to scale up. Because no matter how profitable these companies are,
00:06:30.060 they've always got the Chinese government behind their back. And this gives them a massive advantage
00:06:33.720 over the West. They don't have to deal with pesky human right laws, ethical impediments,
00:06:37.460 or even profitability. Instead, they can be saved from the knowledge that as long as they pull the
00:06:41.000 party line, they can get away with virtually anything. And this isn't just within China,
00:06:44.760 this is everywhere. They get government backing abroad, as all of these Chinese big social media
00:06:48.780 sites are practically a third party of the Chinese government. And as they work in tandem,
00:06:52.680 these companies have become an unstoppable force.
00:06:55.280 And so whilst the Western tech companies are always at each other's throats,
00:06:58.180 China's tech giants have been allowed to build their monopolies in peace.
00:07:01.040 Which is why every day, China gains a little more ground on the West.
00:07:03.960 Because for every user and customer that China gains, Silicon Valley gets weaker.
00:07:07.780 And this new threat has been awful for big tech...
00:07:09.920 Communism is literally invading the West.
00:07:11.860 ...bottom lines.
00:07:12.740 And the true consequences have only just begun today.
00:07:16.860 But before we continue, I want to tell you about...
00:07:19.000 That's my...
00:07:19.500 And by the end of 2016, some journalists were hailing Silicon Valley as the future.
00:07:30.920 They said this because something dramatic had changed.
00:07:33.180 The list of the top companies used to always be dominated by oil and manufacturing,
00:07:37.020 and a few financial giants that relied on their sheer scale to dominate.
00:07:39.680 But these companies had now been replaced by Google, Amazon, Tesla, Apple, and Microsoft,
00:07:44.340 pushing out the old guard.
00:07:45.720 However, despite their immense valuations,
00:07:47.440 these companies still weren't nearly as profitable as they should have been.
00:07:50.320 From 1995 to 2015, Amazon only made $2 billion in profits,
00:07:54.980 despite the company approaching a trillion dollar net worth.
00:08:17.440 now yes this move was meant to dodge taxes yet it still portrayed a significant disconnect
00:08:30.780 between silicon valley and the rest of the world rather than focusing on profitability
00:08:36.360 silicon valley companies were much more focused on growth and the best example of this is uber
00:08:41.020 you see uber spent years focused entirely on growth above anything else they embodied the
00:08:45.700 Silicon Valley mantra, breaking laws in industries to cement themselves in the market, with a massive
00:08:50.060 leak showing that Uber executives were shown instructing their employees to use chaos and
00:08:53.660 violence to uproot the taxi industry and put pressure on governments. And of course, they had
00:08:58.000 big problems with actually making enough money. I mean, their business model still has incredibly
00:09:02.200 low margins, even after they started to squeeze every penny they could and raising all of their
00:09:06.280 prices, which has caused Uber to be in a worrying situation. With market saturation, their stock
00:09:10.880 price is plummeting, and the company streams of market dominance are now fading into the ground.
00:09:14.800 But Uber does still have a slight chance, as Silicon Valley overconfidence has led to way more destructive collapses, specifically in the case of WeWork.
00:09:22.560 In early 2019, WeWork was seen as an innovative new company that was set to change the world of work.
00:09:29.740 Although it was founded in New York, the Silicon Valley mentality had definitely gotten to its founder.
00:09:33.780 I don't trust him. I don't trust them. What is it? What is it about these people, bro?
00:09:44.660 Why do you look like Nick is not green? Why do you look like Nick is not straight, bro?
00:09:51.080 These are the people that have taken over the world. It's true. It's not that Jews run the
00:09:55.880 world. It's nerds run the world. Tech has given all the power to geeks.
00:10:03.780 and Newman. The charismatic CEO was so good at convincing investors that he pulled in billions.
00:10:09.120 And only a few years after its founding, the company had raised over a billion dollars for
00:10:12.760 their office space company. And I say office space company, but WeWork was still listed
00:10:16.580 as a tech company. And so WeWork managed to raise over a billion dollars for the company.
00:10:21.060 And this was despite mass layoffs of the company and poor financial performance.
00:10:24.680 Because simply enough, investors were just in love with the idea rather than the product in
00:10:28.560 front of them. In fact, WeWork lost over $2 billion in 2018. And yet the hype continued
00:10:33.540 Analysis stated that the company was now worth over $40 billion.
00:10:37.420 This was more than giants like Airbnb.
00:10:39.620 And by September, the company attempted to gain even more investment.
00:10:43.200 Chase Bank, Goldman Sachs.
00:10:45.620 ...money, beginning the process of an IPO or initial public offering.
00:10:49.160 And this would open shares of the company to the public,
00:10:51.180 raising even further billions for WeWork.
00:10:53.200 And yet even with this enormous amount of investment,
00:10:55.720 the IPO started to gain scrutiny as investors started to see
00:10:58.640 that the company was really making no money.
00:11:00.640 and it portrayed the true reality of the Silicon Valley business model.
00:11:03.720 Massive debt and low revenue propped up by other people's money.
00:11:06.840 And so their $40 billion valuation was cut by three quarters in a matter of days,
00:11:11.740 resulting in 20% of the company being fired.
00:11:14.420 And Newman, their CEO and other executives were all forced to resign
00:11:17.260 and the company was forced to cut back on its massive growth plans.
00:11:20.260 Reality hit the company hard
00:11:21.540 and today people are questioning the expiry date of WeWork.
00:11:24.440 But yet again, Silicon Valley didn't learn from this example.
00:11:27.180 Despite the very same business practices being used across tons of tech companies,
00:11:30.640 This was just seen as an isolated case by tech elites.
00:11:34.960 Besides, now wasn't the time to consolidate and slow down.
00:11:37.740 And then as 2019 came and went, the world was forced into the pandemic.
00:11:41.280 First US case has been detected.
00:11:43.460 There's confirmation the coronavirus has reached Australia.
00:11:46.720 And it was here that tech companies would double down.
00:11:48.940 COVID-19, as it was for so many other billionaires and corporations,
00:11:52.180 was a massive opportunity for big tech.
00:11:54.320 The pandemic saw tech companies' values rise by hundreds of billions.
00:11:57.700 They made so much money, they barely even knew what to do with it.
00:12:01.040 And it was the belief at the top of these companies that this is just how things were.
00:12:04.680 Tech dominance into the future seemed all but guaranteed.
00:12:07.400 Zuckerberg and others would be risky and short-sighted in their investments,
00:12:10.400 assuming that revenue levels would stay strong after the pandemic.
00:12:13.260 And that's why Meta's workforce grew by 28% in just a year.
00:12:16.920 And Amazon massively expanded their own operations,
00:12:19.360 seeing their profits soar by over 220%.
00:12:22.200 Apple spent an extra $90 billion just buying back their own stock during the pandemic,
00:12:26.640 betting an amount worth more than the GDP of Sri Lanka on their continued success.
00:12:30.620 You see, tech companies made massive investments into themselves,
00:12:33.280 betting that the good times would never end.
00:12:35.120 And it was this overconfidence that meant that when their profits finally did start to slow down,
00:12:38.960 they wouldn't be able to cope with it.
00:12:40.500 But overconfidence wasn't the only problem that worsened during the pandemic.
00:12:43.780 You see, the culture war was getting more and more intense as people spent more time online.
00:12:47.620 Unwinnable arguments raged as people's lives got measurably worse.
00:12:50.760 And whilst the pandemic was lucrative for tech companies, they were some of the only winners.
00:12:54.640 with lockdowns completely destroying the economy,
00:12:57.160 putting millions out of jobs and businesses out of business.
00:13:00.080 And it's impossible to measure the negative effects of the pandemic
00:13:02.400 on people and their mental health.
00:13:04.020 However, what was measurable?
00:13:05.220 Now, we just all moved on and pretend it didn't happen.
00:13:07.280 And when I talk about it, like, Sneakers stuck in 2020.
00:13:10.300 Bro, this was like one of the biggest events that ever happened in my lifetime.
00:13:14.340 It's really worthwhile to talk about the fact that we stayed inside,
00:13:17.780 quarantining for over a year.
00:13:20.460 A lot of people in New York City.
00:13:22.180 What was the heating up of the culture war?
00:13:24.640 And eventually, the results of this would be social media fatigue.
00:13:27.540 People were just sick of the culture war.
00:13:29.320 And China was now also closing in on Silicon Valley.
00:13:31.620 As over the pandemic, TikTok grew by hundreds of millions of users,
00:13:35.140 surpassing 1.1 billion in 2021.
00:13:37.920 However, all of these combining factors hadn't affected big tech yet,
00:13:41.000 but it would only be a matter of time.
00:13:43.000 Meanwhile, the tech billionaires were enjoying their moments in the sun.
00:13:45.840 Jeff Bezos spent millions on a personal space trip,
00:13:48.480 whilst Elon Musk became Times Person of the Year for 2021.
00:13:51.640 But all of this would turn out to be some of the last good news
00:13:53.800 these tech billionaires had, as once the world finally opened up again, it signaled the end of
00:13:58.260 Silicon Valley's boom, even if no one believed it. For example, at Meta, revenue growth had risen to
00:14:03.120 over 50% in the summer of 2021, but it dropped sharply over the next nine months, falling to
00:14:08.080 just 5% by the first quarter of 2022. Amazon also saw a sharp decline, from over 40% to around 7%
00:14:14.880 in the same time span. Even usually stable companies like Microsoft to Apple suffered
00:14:19.040 the same fate, seeing their growth levels fall off. So what happened here? Well, all of the
00:14:23.380 growing problems that Silicon Valley thought they could ignore were finally making their mark. And
00:14:27.220 whilst they had been shielded from the pandemic recession by artificial demand, that was all over
00:14:31.600 now. And the economy was only getting worse. So people began to spend much less on products.
00:14:36.120 People didn't care about ads. Essentials became more expensive, so people had less disposable
00:14:40.460 income. Services saw a boost as well, as people made up for the last time. And on top of this,
00:14:45.020 the culture war had burned tons of people out as well, leading to less uses of social media.
00:14:49.220 A Canadian survey found that less people were using Facebook, YouTube and Twitter in 2022 than in 2020.
00:14:54.680 And the only tech company that was spared from the decline was TikTok.
00:14:57.640 Their growth was unimpeded, maybe because they're artificially propped up by the Chinese government.
00:15:01.680 But it was clear for everyone in Silicon Valley that they were losing their audience's attention.
00:15:05.300 And with this dramatic reduction in attention came dramatic cuts in their profits.
00:15:09.220 And this is when the cracks started to show.
00:15:11.060 Tech companies have become so focused on growth that when it dried up, it hit them much harder than other industries.
00:15:15.860 Over the course of 2022, tech companies lost more and more money,
00:15:19.340 leading to their CEOs to make some erratic decisions.
00:15:21.640 Musk took over as CEO of Twitter after years of negotiations and legal battles.
00:15:25.280 He started off by firing large parts of the workforce,
00:15:27.480 W, that was my favorite moment of 2022,
00:15:29.840 leading to massive technical glitches and problems with the app.
00:15:34.320 Things were going so badly that he was forced to resign from the company.
00:15:37.720 Is this true?
00:15:39.800 Google had put much of their focus on their new Stadia cloud console,
00:15:42.920 but as with every other big tech company,
00:15:44.440 2022 also saw its demise, being forced to refund everyone who bought it without Google actually
00:15:49.440 getting the products back. Additionally, Uber saw a sharp decline in their business,
00:15:53.180 the ruthless competition, massive leaks, and higher prices. Meta stock value dropped by around 60%,
00:15:58.560 with Tesla's dropping by 70%. So once 2022 was nearing its end, tech companies realized it wasn't
00:16:03.860 going to get any better anytime soon. They needed to cut costs, which is why you started to see
00:16:07.920 articles of these big tech companies firing tens of thousands of workers, like with Microsoft firing
00:16:12.820 over 1,000 employees, then Stripe, a growing startup, letting go of 14% of their workforce.
00:16:17.940 Elon was forced to lay off nearly 4,000 people from Twitter, with Meta following shortly after
00:16:22.200 laying off a further 11,000 people. Amazon cut their numbers by 10,000, and all of this had
00:16:27.160 happened in just over a month. Eventually, Amazon would double their numbers in December,
00:16:30.900 as clearly they hadn't shrunk enough. And these weren't minimum wage employees either. They were
00:16:34.600 both high-skilled and incredibly expensive employees, and in total, over 1,000 tech
00:16:38.820 companies fired over 150,000 workers. But Silicon Valley had made their bed with their risky
00:16:44.080 investments and growth-focused ethos. The same companies that had fought over these workers in
00:16:48.000 the talent wars, which was just a year or two ago, were now letting them go and incurring massive
00:16:52.280 costs in the process. And it wasn't just going to cost them at the time either. These firing sprees
00:16:56.460 represent a massive amount of people with incredibly valuable skills. A job board called
00:17:00.660 Tech Jobs for Good has seen massive increases in skilled job seekers off of the back of these
00:17:04.680 layoffs. People who have seen the fast life of big tech companies are now instead looking to
00:17:08.480 make a difference, despite a small hit to their paychecks. And this is one of the ways in which
00:17:12.080 the collapse of big tech will inadvertently benefit the world. But perhaps this is symptomatic
00:17:16.080 of a much larger trend in our economy. As going into 2023, with the UN predicting we're going to
00:17:20.860 be in a massive recession, it seems like Silicon Valley can only expect more and more suffering.
00:17:25.100 The future looks grim. Ad buys are low, which has hurt all of the social media companies like
00:17:28.880 Meta and supply chain issues are now threatening hardware companies like Apple and Microsoft.
00:17:33.040 Governments are also now souring on big tech, seeing their influence as destabilizing.
00:17:37.180 Microsoft's $69 billion acquisition deal for Activision and Blizzard
00:17:40.440 is being debated by monopoly watchdogs around the world.
00:17:43.340 The FTC has already tried to block it.
00:17:45.260 Meanwhile, the whole tech industry is waiting for another court verdict
00:17:48.140 on recommendation algorithms.
00:17:50.060 Google is being sued for recommending videos made by terrorists,
00:17:52.800 which then incite an attack in France.
00:17:55.320 And if they're found liable,
00:17:56.380 this will upend years of legal doctrine stating that digital platforms
00:17:59.320 aren't responsible for what people post.
00:18:00.880 You can find my old YouTube vids in the creativity case.
00:18:02.740 The results of the case will dictate what's allowed for years to come
00:18:05.720 and will possibly cripple companies like Google and Meta.
00:18:08.280 It is very clear to everyone in the tech world
00:18:10.280 that 2023 is going to be the true test for these tech giants.
00:18:13.600 And so far, only a week into the year,
00:18:15.480 and Amazon is already shedding 18,000 more jobs,
00:18:18.360 with more cuts expected in the next few months.
00:18:20.480 It should be clear by now that it's going to be a very rough year for Silicon Valley,
00:18:23.780 and only time will tell whether they're ever going to be the giants they once had.
00:18:26.420 Notice how Rumble's not here.
00:18:29.660 I'm telling you, this is the year.
00:18:31.100 This is the year for the Wumble takeover, bro.
00:18:33.240 that misinformation
00:18:34.520 I think they're gonna get
00:18:35.500 stricter and stricter
00:18:36.220 with the censorship
00:18:36.880 and one was gonna
00:18:38.920 keep taking over
00:18:39.600 that's it
00:18:45.100 this is your job