Infrastructure, that’s my word of the year for 2023, and my main prediction. I wanted to take this opportunity to try and explore one ‘item’ in depth, since I usually spread myself evenly between multiple different items in my newsletter. If you’d like to see my other predictions for 2023, please do consider checking out said newsletter tomorrow! As was the case with my 2022 retrospective, this blog and the newsletter are complimentary. 

‘Infrastructure’ is also my answer to the question posed as the title of this blog. I predict that the year of 2023 will be marked by significant investments and collaboration. These will be aimed at building the infrastructure of the Metaverse. “Wait what? I thought that ‘fad’ passed? Isn’t it all about AI now?” Some might very reasonably ask. The answer is yes, but also no. The ‘yes’ I covered in the retrospective, talking about the big crypto crash. Crypto wanted to the metaverse to be about crypto, it failed. The ‘no’ is what this blog post is covering, it's why I want to focus on infrastructure.

Metasoft:

‘Metasoft’ is how I’m referring to the partnership announced back in 2022 between Microsoft and Meta. In 2023, I see this partnership hanging over the rest of the tech industry like a Sword of Damocles. For those not into historical literature, let me give a quick summary of the sword of Damocles before I explain why I see the Metasoft partnership in this light. The Sword of Damocles is commonly attributed to the Roman philosopher Cicero in his 45 B.C. book “Tusculan Disputations.” What happens in this story is that Dionysius II, a cruel tyrant, rules the Italian island of Sicily with an Iron fist. But he’s made so many enemies that he’s consumed by his paranoia. A courtier called Damocles pisses him off real good one day by openly envying his position. So Dionysus II dares Damocles to experience the life he envies for himself. Initially overjoyed, Damocles eventually discovers that the fancy throne he was propped up on has a sharp sword hanging over it, suspended by a single thread of horsehair. American president Kennedy gave a famous speech referencing this story during the 1961 cold war as well “Every man, woman and child lives under a nuclear sword of Damocles, hanging by the slenderest of threads, capable of being cut at any moment by accident or miscalculation or by madness.”

What the Sword of Damocles represents now in popular culture is a looming threat, and what it represented to Cicero is the idea that the more you had, the more you stood to lose. I don’t really buy into the hyperbole that AI is equivalent to the nuclear bomb, but what I do believe is that we, the wider public, but companies as well, will have our Damocles moment as we further experience the power and possibilities, and also the dangers and complexities of AI over the course of 2023. Incredibly new opportunities and luxuries, but danger as well.

There’s a more recent story to draw from to further expand on this narrative. In the 6^th episode of Breaking Bad’s 4^th season, antagonist/antihero Walter White famously yells “I am the danger!” To quote veteran tech analyst Ben Thompson “what Silicon Valley, generally failed to understand about Microsoft’s competitive advantage: the company doesn’t win just because it bundles, or because it has a superior ground game. By virtue of doing everything, even if mediocrely, the company is providing a whole that is greater than the sum of its parts, particularly for the non-tech workers that are in fact most of the market.” Which is to say that I think that Metasoft is the sword hanging over Damocles, and the thread is how well and meaningfully Meta and Microsoft can work together.

This is where we come back to another part of Cicero’s tale, remember, the more you have, the more you stand to lose. I focussed on Microsoft’s attempts to acquire Activision Blizzard in my retrospective, Microsoft and Meta have a lot of enemies right now, enemies that certainly would consider them cruel tech tyrants. It will remain to be seen whether there can be happiness for “one who is under constant apprehensions.”

Adpocalypse 2: And Your Search Engine Too!

When talking about the impact of Apple’s App Tracking Transparency (ATT) on Meta, Thompson notes that this “hurt Meta more than any other company, because it already had by far the largest and most finely tuned ad business, but in the long run it should deepen Meta’s moat.” Meta has had a lot of controversies, and part of my reluctance to stop calling it Facebook has to do with all those controversies that still stain the Facebook brand. But ‘Facesoft’ just…doesn’t quite roll off the tongue nearly as nicely as Metasoft does it…?

I’m also calling the collaboration Metasoft for the more practical reason that if Meta and Microsoft go ‘Et Tu Brute’ on one another too early, their ‘enemies’ will be in a perfect position to take them down. Either they win together, or they get taken down together. And they certainly stand to win, because the level of investment needed to escape the gravitational pull of advertising giants like Google and Apple is simply not viable for smaller companies. Snap or Twitter aren’t in the same league as either Microsoft or Meta in this regard, and whilst Meta might have lost its dominance over the US ad market, it isn’t held hostage by its primary revenue model the way Google is.

Microsoft is already going for Google’s throat by integrating GPT-3 (GPT-3.5 powers ChatGPT) into its Bing search engine, a code red situation for Google because… Google search isn’t meant to help you search. Google search is meant to keep you searching so you’ll see more ads whilst doing so. An AI simply giving you the answer to your question is a nightmare scenario for Google. AI definitely isn’t going away, so I predict Google is going to have a hell of a year trying to reinvent itself as AI search takes off. And there you have it, my biggest prediction for 2023! I predict that it will be the battle of the Infrastructures.

Thanks for reading! I hope you all have a wonderful and fulfilling 2023, and I’m super excited to keep improving my newsletter this year, branching out into new things if it goes well enough. To that end, I’ll be taking some courses here and there, and there are a few dates I’d like to mention now that I’ve got your attention. I will not be publishing the newsletter on Thursday January 12^th, Thursday January 26^th, or on Thursday February 9^th because of a course I’ll be attending on the days prior, which would normally have been writing days. The newsletters will instead be published on the Fridays of those respective weeks (so the 13^th, 27^th, and 10^th). As mentioned previously, you can find the rest of my predictions in this week’s newsletter, which will be out tomorrow!