Undoubtedly, American big tech, especially the one most tied to stock exchanges, is having a bad time. However, it must be understood that this moment is aggravated by structural problems of the stock exchange and finance, so in reality things are not as the newspapers superficially write.
Let's start with Twitter. What to say? That Elon Musk was an overrated charlatan I have written several times. That he lives by selling science fiction from the 60s should be obvious by now (I say, but have you seen the presentation of his android?), and now that he's set foot on Twitter, which for many of us is an IT environment, I think his pompous imbecility is evident.
I could start from your brilliant idea of blocking microservices because they "do nothing", to discover that you have disabled two-factor authentication. I could talk about how he first fired the entire security department and then asked people to give him $8 for checking, via credit card. And I could go on and on. What is certain is that today Twitter is no longer on the stock exchange, and the latest sensible information says that it was worth 8 billion dollars. Musk paid 44 billion for it. A business genius, indeed.
I don't know if Twitter will shut down, but if it does, one of the biggest systemic shits in the American system would come to light.
Whose data does twitter keep on its disks?
Suppose it shuts down for real. But close completely. It means that he fires everyone and closes the corporate position of Twitter INC. Pay your creditors and close the company.
Good. At that point, all that's left is his. Like the old punching bag in his garage. Hard drives? His. What data is there? They are not even subject to the law. What can it do about it? What he wants. You can even sell them at your parish's charity auction if you like.
But it's your data. Do you remember when you found that nice guy on twitter and you made an appointment with him at the hotel on the day of the fair and we ran out of sex? Well, that chat is still there. All. There is everything.
The European guarantor can't do anything about it. Twitter INC does not exist. Musk exists, but does not offer any services. You know it has the data, but it doesn't mean anything.
And here is the first systemic flaw: non-existent legislation on data.
No law says what to do with data when an IT company shuts down.
And this systemic deficiency is about to blow up in your face, should Twitter really shut down. Musk could sell the servers to the highest bidder, including the data and databases.
Your data. Your chats. Your porn pictures. Everything good or bad you've ever done.
The second systemic factor that is at stake is the end of venture capital welfare.
When central banks printed money for free, or even with negative interest, a Soviet system was created. In a Soviet system the central bank prints the money and, by order of the supreme soviet and the five-year planners, transfers it to the industries, financing them.
As you can see, the differences between the two systems mainly reside in a proxy, an intermediary who moves money between the central bank and companies.
In theory, when the system worked, it was because venture capital was very selective and ONLY financed good ideas. But with microscopic interest rates and continued QE, efficiency was lost and the system ended up being as meritocratic as the Soviet one.
As a result, Silicon Valley lived in an essentially Soviet system, where money poured in regardless of merit. In this rain of money, people like Elon Musk have thrived, but also all those entrepreneurs (Bezos) who have been able to afford to tell shareholders to wait to go and earn, since at the end of the day the stock market was overflowing with money and those companies would get MORE money from venture capital. Whether they were interesting or not.
After all, even if Venture Capital had lost out, it would only have to securitize the toxic securities and sell them to the central bank, which did QE: a game in which you either win, or you win.
On this lived Twitter, which made no money for the first ten years. Other stocks swelled with this, receiving money people had gotten for nothing (salaries of $2 million/year for a programmer, but in stock options), etc.
And here is the systemic problem that emerges:
The money printer has stopped. And inflation has come to cut them off with its scythe. And the mechanism broke.
And this also applies to cryptocurrencies and all the "investments" that only worked because the stock exchanges were so swollen with money that they didn't know how to invest it in the real economy (which is growing slowly) and therefore they even chose cryptocurrencies. The miracle workers of a practically Soviet system.
Be prepared for many meltdowns in the IT world. Layoffs and deflating bubbles.
This is just the beginning. If you have invested in technology stocks, EXIT. IMMEDIATELY.
That said, the issue of layoffs. There is a systemic part to this.
These companies have hired a LOT more than necessary. For one reason: to remove minds from competitors, and from any nascent companies. You will have seen the panic when tiktok arrived: they didn't think a competitor could be born.
They had sucked in all the possible engineers, and they had also formed alliances in order not to allow them to quit and to open new companies, which were suffocated with quite unfair methods.
These are companies that have not made innovations for years. Facebook has been around for years and years, ditto google, amazon and so on. They have been equal to themselves for years and years, and at the most they buy their competitors.
But how did they prevent the emergence of companies capable of overcoming them? Simple: as they sat on a pile of money, they caused an artificial shortage of engineers, asking for PhDs even to work at reception. (To then get pissed at the academics when the word got out and the PhDs stopped asking to be gatekeepers).
In one sense, Musk is right: the company had really hired too many people. ALL companies of that type have done this.
And now that the money printer, they can't keep all those people anymore, and they're going to have to release them on the market. Where they can go to produce innovation.
Finally, the market will have a shot in the arm.
But on the other hand, what will happen is that from these people other new companies will be born, and so be prepared to finally see innovation again.
But this too was a systemic problem: why has no one ever bothered to regulate the labor market to prevent these operations?
The aftermath dildo rarely comes back lubricated.