SNEAKO - January 11, 2023


SNEAKO Reacts To Why Big Tech Is Collapsing!

Hosted by
Nicolas Kenn De Balinthazy
Mentioned
Newman Jeff Bezos Elon Musk Zuckerberg Fortnite Blizzard Stripe Tesla Meta Riot
SNEAKO Reacts To Liberal Agendas Being Placed In Schools SNEAKO Exposes Pearls BOT Sister

Episode Stats


Length

18 minutes

Words per minute

210.48

Word count

3,949

Sentence count

239

Harmful content

Toxicity

8

sentences flagged

Hate speech

5

sentences flagged


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).
Toxicity classifications generated with s-nlp/roberta_toxicity_classifier .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00 Why big tech is collapsing? Oh shit, there we go. 0.99
00:00:04 Bro, I miss watching with this exact way I wanted to watch right now. 1.00
00:00:06 Silicon Valley is in chaos.
00:00:07 Almost all of the major big tech companies are collapsing.
00:00:10 For example, Meta is worth over a trillion in 2021.
00:00:13 But just a year later, and their value has dropped by two thirds.
00:00:16 And the other giants aren't far behind.
00:00:18 Amazon, Meta, Twitter, Tesla, Netflix have all seen massive revenue drops.
00:00:22 Not rumble though! Rumble in the chat!
00:00:24 And the scale of these losses is unprecedented.
00:00:26 especially considering big tech has been so unstoppable for the last decade in fact revenues
00:00:31 and profits were skyrocketing silicon valley was a billionaire factory with some of the most
00:00:34 prolific billionaires building their names and their bank accounts on the back of big tech
00:00:38 companies bill gates elon musk jeff bezos mark zuckerberg jack dorsey all of them were created
00:00:42 by the massive tech boom of the last four decades but then the bubble popped and now the biggest
00:00:47 names in silicon valley are seeing their revenue plummet firing hundreds of thousands of employees
00:00:52 with the stock value of almost every big tech company falling dramatically which leads us to
00:00:56 the question, how did it get this bad so quickly? Well, you see, tech was a growing part of the
00:01:00 world's economy for years. Over the last decade, tech companies have only got larger and larger.
00:01:04 Now, of course, there were ups and downs. For example, the dot-com crash of the late 90s
00:01:08 proved the catastrophic consequences of overvaluing tech companies. However, over time,
00:01:12 the industry always picked up again. It was a measured climb at first, but soon people forgot
00:01:15 the mistakes of the past, and as the years rolled by and technology improved, the companies behind
00:01:19 it grew richer and richer. But there were massive problems on the horizon for Silicon Valley,
00:01:23 because the path wasn't all golden.
00:01:25 For example, companies like Uber have coasted on their potential,
00:01:28 hoovering up investments without a proper model for profitability.
00:01:31 The same can be said for Twitter.
00:01:32 And yet despite this, all of the giants of the industry
00:01:34 go to immense proportions on paper.
00:01:36 For example, in 2018, Meta surpassed $500 billion in net worth
00:01:40 and Amazon were closing in on a trillion.
00:01:42 But all of these companies had a similar problem.
00:01:44 They just weren't worth what people thought they were.
00:01:46 Their business models were shaky and in constant need of investment.
00:01:49 Or they just didn't make that much money to begin with.
00:01:51 Their margins were always incredibly tight.
00:01:53 And that's why almost all of these tech billionaires never look at the stock price.
00:01:56 That whole period is very interesting because the stock is not the company
00:02:00 and the company is not the stock.
00:02:02 And so as I watched the stock fall from 113 to 6,
00:02:06 I was also watching all of our internal business metrics.
00:02:10 Every single thing about the business was getting better and fast.
00:02:13 Because they believed as their technology spread into every aspect of the world,
00:02:16 companies would always ride the wave of future potential.
00:02:19 Their shaky business model just didn't appear to be an issue at this point.
00:02:22 All these big tech companies were gaining more and more power and it seemed like they were
00:02:25 untouchable because big tech had something invaluable, the eyeballs and data of the
00:02:29 entire world. You see, ever since they started putting in user data at the massive levels they
00:02:33 do now, social media companies were then further driven to maximize their engagement, keeping
00:02:37 people on their app for as long as possible, and often as possible became the most important thing,
00:02:42 which is why we're all so addicted to our phones and our laptops. It makes all of these big tech
00:02:48 companies billions of dollars allowing them to sell more and more ads and if anything is free
00:02:52 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 social media is free besides if you're a bot who buys twitter blue of course i would never buy
00:03:01 twitter blue but it's all free so how are they gonna make money off of your brain off of selling 0.98
00:03:05 you products all the time off of tracking your data and shilling you fucking brooms if i said 0.99
00:03:09 the word broom five minutes ago that's how constantly advertising specifically for what 0.99
00:03:15 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 keep you as addicted as possible forever. And over time, these companies perfected this process
00:03:24 by manipulating psychology, making the app so addictive that the entire world couldn't live
00:03:28 without their smartphone. And during this process, they found out that anger and fear are some of the
00:03:32 best ways to keep people engaged. And so as the algorithms were fine-tuned for engagement, they
00:03:36 pushed more extreme, more provocative posts above everything else, putting them in front of
00:03:40 everyone's faces constantly, all while censoring any information that didn't fit into Silicon
00:03:45 Valley's political narrative. Which is why Twitter, Meta, and all these other companies
00:03:49 became the breeding ground for social media addiction, censorship, and hatred. And as time
00:03:53 went on, the cycle ramped up and the culture war worsened. And these changes in the online space
00:03:57 were reflected in the real world, leading to riots, unrest, and collapse. It didn't matter to the tech
00:04:01 companies though. In fact, this was in their interest. And instead of tackling the problems
00:04:07 that they had caused themselves with their algorithms,
00:04:09 companies start to then lean further on censorship,
00:04:12 suppressing all counter-opinions in the name of misinformation.
00:04:15 But this solution wouldn't...
00:04:16 Yep, this is why people are going to start to want to come to Rumble.
00:04:19 I think that debate I had about the vaccine with Zestiny
00:04:22 really helped because people...
00:04:24 You can't even entertain that conversation.
00:04:25 You can't even entertain the idea that the vaccine is killing people.
00:04:28 You have to say that on Rumble.
00:04:30 Work forever.
00:04:30 I got like five people's strikes just for them reacting to that debate.
00:04:34 I got medical misinformation strikes. 1.00
00:04:36 You fucking bots. 1.00
00:04:37 How does that feel? 1.00
00:04:37 That's why I got banned.
00:04:38 They're going to paint me as a violent massager.
00:04:39 I got banned for medical misinformation.
00:04:41 Companies were going to pay the cost for their meddling in public discourse.
00:04:44 However, for now, they had to deal with a much more conventional problem, competition.
00:04:47 Over the past decade, China has exploded into the technology industry.
00:04:51 Companies like Tencent, Huawei, and Bydance have been eating into the Western market share
00:04:55 on a global scale.
00:04:56 In fact, Tencent has made numerous takeovers of Western companies like Riot, Epic Games,
00:05:00 and even Ubisoft.
00:05:01 And through these moves, they've undermined Western dominance in the lucrative gaming
00:05:04 industry.
00:05:04 with China owning some of the most popular games today
00:05:07 like Fortnite and League of Legends.
00:05:08 China owns Fortnite and League of Legends?
00:05:11 I didn't know that Fortnite was CCP propaganda.
00:05:13 China's also taking over with things like TikTok
00:05:15 and Tencent's investments in Reddit and Discord.
00:05:18 And then Huawei attacked hardware manufacturers,
00:05:20 releasing cheaper alternatives
00:05:22 loaded with Chinese data collection technology.
00:05:24 Yeah, IOMI did the same, but to even greater effect.
00:05:26 Despite only being founded in 2010,
00:05:29 they've gained over 12% of the market already.
00:05:31 And ByteDance is probably the most sinister.
00:05:33 I mean, China was well aware of the disruptive powers of social media long before the West
00:05:36 had any idea, and they studied what the Western companies were doing with engagement and turned
00:05:40 it into an R form, with TikTok exploding in popularity by playing on Silicon Valley's
00:05:44 addictive business model.
00:05:45 And by learning from Silicon Valley's successes and mistakes, TikTok has grown by 400% every
00:05:50 single year, seizing Western social media companies' audiences from under their noses,
00:05:55 which is why almost every major app has now adopted TikTok's short video model.
00:05:59 and to put it plainly this is a targeted attack on silicon valley all these companies have incredibly
00:06:04 close relationships with the ccp youtube shorts is about to take off that's why another reason 1.00
00:06:09 to join the creativity kit is youtube shorts are going to start monetizing within three weeks so
00:06:12 you should start preparing for that everybody who clips it up for tiktok start preparing because the
00:06:16 monetization is going to destroy tiktok tiktok you don't monetize how many views you get but youtube
00:06:21 shorts bot tube shorts are about to take over three weeks start preparing p which has given
00:06:26 given them enormous room to scale up. Because no matter how profitable these companies are,
00:06:30 they've always got the Chinese government behind their back. And this gives them a massive advantage 0.99
00:06:33 over the West. They don't have to deal with pesky human right laws, ethical impediments,
00:06:37 or even profitability. Instead, they can be saved from the knowledge that as long as they pull the
00:06:41 party line, they can get away with virtually anything. And this isn't just within China,
00:06:44 this is everywhere. They get government backing abroad, as all of these Chinese big social media
00:06:48 sites are practically a third party of the Chinese government. And as they work in tandem,
00:06:52 these companies have become an unstoppable force.
00:06:55 And so whilst the Western tech companies are always at each other's throats,
00:06:58 China's tech giants have been allowed to build their monopolies in peace.
00:07:01 Which is why every day, China gains a little more ground on the West. 0.83
00:07:03 Because for every user and customer that China gains, Silicon Valley gets weaker.
00:07:07 And this new threat has been awful for big tech...
00:07:09 Communism is literally invading the West.
00:07:11 ...bottom lines.
00:07:12 And the true consequences have only just begun today.
00:07:16 But before we continue, I want to tell you about...
00:07:19 That's my...
00:07:19 And by the end of 2016, some journalists were hailing Silicon Valley as the future.
00:07:30 They said this because something dramatic had changed.
00:07:33 The list of the top companies used to always be dominated by oil and manufacturing,
00:07:37 and a few financial giants that relied on their sheer scale to dominate.
00:07:39 But these companies had now been replaced by Google, Amazon, Tesla, Apple, and Microsoft,
00:07:44 pushing out the old guard.
00:07:45 However, despite their immense valuations,
00:07:47 these companies still weren't nearly as profitable as they should have been.
00:07:50 From 1995 to 2015, Amazon only made $2 billion in profits,
00:07:54 despite the company approaching a trillion dollar net worth.
00:08:17 now yes this move was meant to dodge taxes yet it still portrayed a significant disconnect
00:08:30 between silicon valley and the rest of the world rather than focusing on profitability
00:08:36 silicon valley companies were much more focused on growth and the best example of this is uber
00:08:41 you see uber spent years focused entirely on growth above anything else they embodied the
00:08:45 Silicon Valley mantra, breaking laws in industries to cement themselves in the market, with a massive
00:08:50 leak showing that Uber executives were shown instructing their employees to use chaos and
00:08:53 violence to uproot the taxi industry and put pressure on governments. And of course, they had
00:08:58 big problems with actually making enough money. I mean, their business model still has incredibly
00:09:02 low margins, even after they started to squeeze every penny they could and raising all of their
00:09:06 prices, which has caused Uber to be in a worrying situation. With market saturation, their stock
00:09:10 price is plummeting, and the company streams of market dominance are now fading into the ground.
00:09:14 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 In early 2019, WeWork was seen as an innovative new company that was set to change the world of work.
00:09:29 Although it was founded in New York, the Silicon Valley mentality had definitely gotten to its founder.
00:09:33 I don't trust him. I don't trust them. What is it? What is it about these people, bro?
00:09:44 Why do you look like Nick is not green? Why do you look like Nick is not straight, bro?
00:09:51 These are the people that have taken over the world. It's true. It's not that Jews run the 1.00
00:09:55 world. It's nerds run the world. Tech has given all the power to geeks.
00:10:03 and Newman. The charismatic CEO was so good at convincing investors that he pulled in billions.
00:10:09 And only a few years after its founding, the company had raised over a billion dollars for
00:10:12 their office space company. And I say office space company, but WeWork was still listed
00:10:16 as a tech company. And so WeWork managed to raise over a billion dollars for the company.
00:10:21 And this was despite mass layoffs of the company and poor financial performance.
00:10:24 Because simply enough, investors were just in love with the idea rather than the product in
00:10:28 front of them. In fact, WeWork lost over $2 billion in 2018. And yet the hype continued
00:10:33 Analysis stated that the company was now worth over $40 billion.
00:10:37 This was more than giants like Airbnb.
00:10:39 And by September, the company attempted to gain even more investment.
00:10:43 Chase Bank, Goldman Sachs.
00:10:45 ...money, beginning the process of an IPO or initial public offering.
00:10:49 And this would open shares of the company to the public,
00:10:51 raising even further billions for WeWork.
00:10:53 And yet even with this enormous amount of investment,
00:10:55 the IPO started to gain scrutiny as investors started to see
00:10:58 that the company was really making no money.
00:11:00 and it portrayed the true reality of the Silicon Valley business model.
00:11:03 Massive debt and low revenue propped up by other people's money.
00:11:06 And so their $40 billion valuation was cut by three quarters in a matter of days,
00:11:11 resulting in 20% of the company being fired.
00:11:14 And Newman, their CEO and other executives were all forced to resign
00:11:17 and the company was forced to cut back on its massive growth plans.
00:11:20 Reality hit the company hard
00:11:21 and today people are questioning the expiry date of WeWork.
00:11:24 But yet again, Silicon Valley didn't learn from this example.
00:11:27 Despite the very same business practices being used across tons of tech companies,
00:11:30 This was just seen as an isolated case by tech elites.
00:11:34 Besides, now wasn't the time to consolidate and slow down.
00:11:37 And then as 2019 came and went, the world was forced into the pandemic.
00:11:41 First US case has been detected.
00:11:43 There's confirmation the coronavirus has reached Australia.
00:11:46 And it was here that tech companies would double down.
00:11:48 COVID-19, as it was for so many other billionaires and corporations,
00:11:52 was a massive opportunity for big tech.
00:11:54 The pandemic saw tech companies' values rise by hundreds of billions.
00:11:57 They made so much money, they barely even knew what to do with it.
00:12:01 And it was the belief at the top of these companies that this is just how things were.
00:12:04 Tech dominance into the future seemed all but guaranteed.
00:12:07 Zuckerberg and others would be risky and short-sighted in their investments,
00:12:10 assuming that revenue levels would stay strong after the pandemic.
00:12:13 And that's why Meta's workforce grew by 28% in just a year.
00:12:16 And Amazon massively expanded their own operations,
00:12:19 seeing their profits soar by over 220%.
00:12:22 Apple spent an extra $90 billion just buying back their own stock during the pandemic,
00:12:26 betting an amount worth more than the GDP of Sri Lanka on their continued success.
00:12:30 You see, tech companies made massive investments into themselves,
00:12:33 betting that the good times would never end.
00:12:35 And it was this overconfidence that meant that when their profits finally did start to slow down,
00:12:38 they wouldn't be able to cope with it.
00:12:40 But overconfidence wasn't the only problem that worsened during the pandemic.
00:12:43 You see, the culture war was getting more and more intense as people spent more time online.
00:12:47 Unwinnable arguments raged as people's lives got measurably worse.
00:12:50 And whilst the pandemic was lucrative for tech companies, they were some of the only winners.
00:12:54 with lockdowns completely destroying the economy,
00:12:57 putting millions out of jobs and businesses out of business.
00:13:00 And it's impossible to measure the negative effects of the pandemic
00:13:02 on people and their mental health.
00:13:04 However, what was measurable?
00:13:05 Now, we just all moved on and pretend it didn't happen.
00:13:07 And when I talk about it, like, Sneakers stuck in 2020.
00:13:10 Bro, this was like one of the biggest events that ever happened in my lifetime.
00:13:14 It's really worthwhile to talk about the fact that we stayed inside,
00:13:17 quarantining for over a year.
00:13:20 A lot of people in New York City.
00:13:22 What was the heating up of the culture war?
00:13:24 And eventually, the results of this would be social media fatigue.
00:13:27 People were just sick of the culture war.
00:13:29 And China was now also closing in on Silicon Valley.
00:13:31 As over the pandemic, TikTok grew by hundreds of millions of users,
00:13:35 surpassing 1.1 billion in 2021.
00:13:37 However, all of these combining factors hadn't affected big tech yet,
00:13:41 but it would only be a matter of time.
00:13:43 Meanwhile, the tech billionaires were enjoying their moments in the sun.
00:13:45 Jeff Bezos spent millions on a personal space trip,
00:13:48 whilst Elon Musk became Times Person of the Year for 2021.
00:13:51 But all of this would turn out to be some of the last good news
00:13:53 these tech billionaires had, as once the world finally opened up again, it signaled the end of
00:13:58 Silicon Valley's boom, even if no one believed it. For example, at Meta, revenue growth had risen to
00:14:03 over 50% in the summer of 2021, but it dropped sharply over the next nine months, falling to
00:14:08 just 5% by the first quarter of 2022. Amazon also saw a sharp decline, from over 40% to around 7%
00:14:14 in the same time span. Even usually stable companies like Microsoft to Apple suffered
00:14:19 the same fate, seeing their growth levels fall off. So what happened here? Well, all of the
00:14:23 growing problems that Silicon Valley thought they could ignore were finally making their mark. And
00:14:27 whilst they had been shielded from the pandemic recession by artificial demand, that was all over
00:14:31 now. And the economy was only getting worse. So people began to spend much less on products.
00:14:36 People didn't care about ads. Essentials became more expensive, so people had less disposable
00:14:40 income. Services saw a boost as well, as people made up for the last time. And on top of this,
00:14:45 the culture war had burned tons of people out as well, leading to less uses of social media.
00:14:49 A Canadian survey found that less people were using Facebook, YouTube and Twitter in 2022 than in 2020.
00:14:54 And the only tech company that was spared from the decline was TikTok.
00:14:57 Their growth was unimpeded, maybe because they're artificially propped up by the Chinese government.
00:15:01 But it was clear for everyone in Silicon Valley that they were losing their audience's attention.
00:15:05 And with this dramatic reduction in attention came dramatic cuts in their profits.
00:15:09 And this is when the cracks started to show.
00:15:11 Tech companies have become so focused on growth that when it dried up, it hit them much harder than other industries.
00:15:15 Over the course of 2022, tech companies lost more and more money,
00:15:19 leading to their CEOs to make some erratic decisions.
00:15:21 Musk took over as CEO of Twitter after years of negotiations and legal battles.
00:15:25 He started off by firing large parts of the workforce,
00:15:27 W, that was my favorite moment of 2022,
00:15:29 leading to massive technical glitches and problems with the app.
00:15:34 Things were going so badly that he was forced to resign from the company.
00:15:37 Is this true?
00:15:39 Google had put much of their focus on their new Stadia cloud console,
00:15:42 but as with every other big tech company,
00:15:44 2022 also saw its demise, being forced to refund everyone who bought it without Google actually
00:15:49 getting the products back. Additionally, Uber saw a sharp decline in their business,
00:15:53 the ruthless competition, massive leaks, and higher prices. Meta stock value dropped by around 60%,
00:15:58 with Tesla's dropping by 70%. So once 2022 was nearing its end, tech companies realized it wasn't
00:16:03 going to get any better anytime soon. They needed to cut costs, which is why you started to see
00:16:07 articles of these big tech companies firing tens of thousands of workers, like with Microsoft firing
00:16:12 over 1,000 employees, then Stripe, a growing startup, letting go of 14% of their workforce.
00:16:17 Elon was forced to lay off nearly 4,000 people from Twitter, with Meta following shortly after
00:16:22 laying off a further 11,000 people. Amazon cut their numbers by 10,000, and all of this had
00:16:27 happened in just over a month. Eventually, Amazon would double their numbers in December,
00:16:30 as clearly they hadn't shrunk enough. And these weren't minimum wage employees either. They were
00:16:34 both high-skilled and incredibly expensive employees, and in total, over 1,000 tech
00:16:38 companies fired over 150,000 workers. But Silicon Valley had made their bed with their risky
00:16:44 investments and growth-focused ethos. The same companies that had fought over these workers in
00:16:48 the talent wars, which was just a year or two ago, were now letting them go and incurring massive
00:16:52 costs in the process. And it wasn't just going to cost them at the time either. These firing sprees
00:16:56 represent a massive amount of people with incredibly valuable skills. A job board called
00:17:00 Tech Jobs for Good has seen massive increases in skilled job seekers off of the back of these
00:17:04 layoffs. People who have seen the fast life of big tech companies are now instead looking to
00:17:08 make a difference, despite a small hit to their paychecks. And this is one of the ways in which
00:17:12 the collapse of big tech will inadvertently benefit the world. But perhaps this is symptomatic
00:17:16 of a much larger trend in our economy. As going into 2023, with the UN predicting we're going to
00:17:20 be in a massive recession, it seems like Silicon Valley can only expect more and more suffering.
00:17:25 The future looks grim. Ad buys are low, which has hurt all of the social media companies like
00:17:28 Meta and supply chain issues are now threatening hardware companies like Apple and Microsoft.
00:17:33 Governments are also now souring on big tech, seeing their influence as destabilizing.
00:17:37 Microsoft's $69 billion acquisition deal for Activision and Blizzard
00:17:40 is being debated by monopoly watchdogs around the world.
00:17:43 The FTC has already tried to block it.
00:17:45 Meanwhile, the whole tech industry is waiting for another court verdict
00:17:48 on recommendation algorithms.
00:17:50 Google is being sued for recommending videos made by terrorists,
00:17:52 which then incite an attack in France.
00:17:55 And if they're found liable,
00:17:56 this will upend years of legal doctrine stating that digital platforms
00:17:59 aren't responsible for what people post.
00:18:00 You can find my old YouTube vids in the creativity case.
00:18:02 The results of the case will dictate what's allowed for years to come
00:18:05 and will possibly cripple companies like Google and Meta.
00:18:08 It is very clear to everyone in the tech world
00:18:10 that 2023 is going to be the true test for these tech giants.
00:18:13 And so far, only a week into the year,
00:18:15 and Amazon is already shedding 18,000 more jobs,
00:18:18 with more cuts expected in the next few months.
00:18:20 It should be clear by now that it's going to be a very rough year for Silicon Valley,
00:18:23 and only time will tell whether they're ever going to be the giants they once had.
00:18:26 Notice how Rumble's not here.
00:18:29 I'm telling you, this is the year.
00:18:31 This is the year for the Wumble takeover, bro.
00:18:33 that misinformation
00:18:34 I think they're gonna get
00:18:35 stricter and stricter
00:18:36 with the censorship
00:18:36 and one was gonna
00:18:38 keep taking over
00:18:39 that's it
00:18:45 this is your job