The instability of the economy and the bubble of start-ups put the heavyweights of Silicon Valley at risk of collapse. The stock market may go down with them.
As the stocks fall and layoffs are on the rise, the founders of the world’s biggest tech companies are losing their status as geniuses. Interest rates keep rising and it is clear that these businesses cannot survive without easy money.
In 2019, in statements to the Observer, Marvin Liao, executive at Yahoo! for more than 10 years and an investor in 500 Startups, he was already warning that there was a unicorn bubble, which “it’s going to burst and it’s going to be ugly”.
Tech startups valued at over $1 billion are called unicorns, even before they go public.
It wouldn’t be the first time we’ve seen a tech bubble burst, as it did in the late 90s and early 2000s. Now, what makes the potential for that bubble to burst different is is his large scale of destruction.
“In early 2000, our typical sale was a $2-3 billion business. Today, it’s a $20 billion to $30 billion business. That’s why we call it the ‘.com’ era on steroids.Jim Chanos, founder of Kynikos Associates, said initiated.
“I think a lot of businesses will evaporate. Many of them will go to zero.shot Jim Chanos, who had already predicted the last bubble at the turn of this millennium.
After crash In 2008, money was pouring into the stock market and the promise of Silicon Valley was attracting investors looking for positive returns. However, now the situation is very different.
The promise of positive financial return is fading, attractive interest rates are a thing of the past, startup accelerators are warning their founders to expect the “worse”, major venture capitalists are cutting their investments, the wages of the technological giants become unsustainable and, at the same time, the stock market threatens to collapse.
“Business plans that didn’t make sense were funded. And the people threw money at anything with technology”, said Chanos. The magic words are “blockchain”, “machine learning”, “artificial intelligence” and “algorithm”.