Jasper, an Early Generative AI Winner, Cuts Internal Valuation as Growth SlowsRead more

Art by Clark Miller.

Even Busts Can Be Good for Tech

Margaret O'Mara
 |  Feb. 28, 2023 9:00 AM PST
Photo: Art by Clark Miller.

These days, big tech CEOs are sounding like grizzled sea captains battening down the hatches for a macroeconomic storm. “This next year or two, the economy is going to test the long-term resolve of a lot of companies,” Amazon’s Andy Jassy noted in late November. “Our operational focus over the next few years is going to be on efficiency and discipline and rigor,” declared Mark Zuckerberg of Meta Platforms, “and just operating in a much tighter environment.” At Google, Sundar Pichai pledged to slow hiring and “focus on a clear set of business and product priorities.”

This is no dot-com bust. The big tech layoffs, while enormous, are a necessary reset after an extraordinary run of growth. Platform companies are down in value, but they still make a great deal of money. Given the frenzy of pandemic-era tech hiring, the layoffs thus far are only a fraction of the new jobs added since the start of 2020.

The era of easy money that fueled Silicon Valley’s longest and largest boom is over. Silicon Valley’s boom-and-bust history certainly shows why macro conditions matter—stagflation hammered the industry in the 1970s, low interest rates boosted it in the 1990s and the quantitative easing of the 2010s powered its longest and biggest boom so far. But other factors have shaped tech business cycles just as much and sometimes more.

Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
Former Apple design chief Jony Ive and OpenAI CEO Sam Altman. Photos by Getty.
Designer Jony Ive and OpenAI’s Sam Altman Discuss AI Hardware Project
Jony Ive, the renowned designer of the iPhone, and OpenAI CEO Sam Altman have been discussing building a new AI hardware device, according to two people familiar with the conversations.
From left to right: Blair Effron, Robert Pruzan and David Handler. Photos by Getty; Tidal Partners.
Exclusive Finance
Disputes, Employee Misconduct Rattle Centerview’s Silicon Valley Dreams
The San Francisco Bay Area–based bankers at Centerview Partners, the investment bank that advised Silicon Valley Bank’s owner and Credit Suisse through recent turmoil, got two doses of bad news last week.
Art by Clark Miller
Exclusive startups entertainment
MasterClass Takes a Crash Course in Frugality
MasterClass had a problem with the shoot featuring its latest star instructor, Walt Disney Co. CEO Bob Iger.
OpenAI CEO Sam Altman and Microsoft CEO Satya Nadella. Photos via Getty
Exclusive microsoft ai
How Microsoft is Trying to Lessen Its Addiction to OpenAI as AI Costs Soar
Microsoft’s push to put artificial intelligence into its software has hinged almost entirely on OpenAI , the startup Microsoft funded in exchange for the right to use its cutting-edge technology.
From left: Paul Graham, Garry Tan and Michael Seibel. Photos by Getty. Art by Mike Sullivan.
Exclusive startups ai
Y Combinator’s Garry Tan Goes to the Mat
Garry Tan was in his happy place. Surrounded by food trucks and techies basking in San Francisco’s September sun, the CEO of Y Combinator snapped selfies with entrepreneurs as he meandered through a crowd of 2,700 attendees at the startup accelerator’s annual alumni event.
Dave Rogenmoser, cofounder of Jasper. Photo via Getty.
Exclusive startups ai
Jasper, an Early Generative AI Winner, Cuts Internal Valuation as Growth Slows
Jasper AI, an early darling of the generative artificial intelligence boom, has cut the internal value of its common shares 20%, according to former employees who were notified by the company.