If Anyone Wants To Know Why Every Tech Company In The World Right Now Is Clamoring For AI Like Drowned

If anyone wants to know why every tech company in the world right now is clamoring for AI like drowned rats scrabbling to board a ship, I decided to make a post to explain what's happening.

(Disclaimer to start: I'm a software engineer who's been employed full time since 2018. I am not a historian nor an overconfident Youtube essayist, so this post is my working knowledge of what I see around me and the logical bridges between pieces.)

Okay anyway. The explanation starts further back than what's going on now. I'm gonna start with the year 2000. The Dot Com Bubble just spectacularly burst. The model of "we get the users first, we learn how to profit off them later" went out in a no-money-having bang (remember this, it will be relevant later). A lot of money was lost. A lot of people ended up out of a job. A lot of startup companies went under. Investors left with a sour taste in their mouth and, in general, investment in the internet stayed pretty cooled for that decade. This was, in my opinion, very good for the internet as it was an era not suffocating under the grip of mega-corporation oligarchs and was, instead, filled with Club Penguin and I Can Haz Cheezburger websites.

Then around the 2010-2012 years, a few things happened. Interest rates got low, and then lower. Facebook got huge. The iPhone took off. And suddenly there was a huge new potential market of internet users and phone-havers, and the cheap money was available to start backing new tech startup companies trying to hop on this opportunity. Companies like Uber, Netflix, and Amazon either started in this time, or hit their ramp-up in these years by shifting focus to the internet and apps.

Now, every start-up tech company dreaming of being the next big thing has one thing in common: they need to start off by getting themselves massively in debt. Because before you can turn a profit you need to first spend money on employees and spend money on equipment and spend money on data centers and spend money on advertising and spend money on scale and and and

But also, everyone wants to be on the ship for The Next Big Thing that takes off to the moon.

So there is a mutual interest between new tech companies, and venture capitalists who are willing to invest $$$ into said new tech companies. Because if the venture capitalists can identify a prize pig and get in early, that money could come back to them 100-fold or 1,000-fold. In fact it hardly matters if they invest in 10 or 20 total bust projects along the way to find that unicorn.

But also, becoming profitable takes time. And that might mean being in debt for a long long time before that rocket ship takes off to make everyone onboard a gazzilionaire.

But luckily, for tech startup bros and venture capitalists, being in debt in the 2010's was cheap, and it only got cheaper between 2010 and 2020. If people could secure loans for ~3% or 4% annual interest, well then a $100,000 loan only really costs $3,000 of interest a year to keep afloat. And if inflation is higher than that or at least similar, you're still beating the system.

So from 2010 through early 2022, times were good for tech companies. Startups could take off with massive growth, showing massive potential for something, and venture capitalists would throw infinite money at them in the hopes of pegging just one winner who will take off. And supporting the struggling investments or the long-haulers remained pretty cheap to keep funding.

You hear constantly about "Such and such app has 10-bazillion users gained over the last 10 years and has never once been profitable", yet the thing keeps chugging along because the investors backing it aren't stressed about the immediate future, and are still banking on that "eventually" when it learns how to really monetize its users and turn that profit.

The pandemic in 2020 took a magnifying-glass-in-the-sun effect to this, as EVERYTHING was forcibly turned online which pumped a ton of money and workers into tech investment. Simultaneously, money got really REALLY cheap, bottoming out with historic lows for interest rates.

Then the tide changed with the massive inflation that struck late 2021. Because this all-gas no-brakes state of things was also contributing to off-the-rails inflation (along with your standard-fare greedflation and price gouging, given the extremely convenient excuses of pandemic hardships and supply chain issues). The federal reserve whipped out interest rate hikes to try to curb this huge inflation, which is like a fire extinguisher dousing and suffocating your really-cool, actively-on-fire party where everyone else is burning but you're in the pool. And then they did this more, and then more. And the financial climate followed suit. And suddenly money was not cheap anymore, and new loans became expensive, because loans that used to compound at 2% a year are now compounding at 7 or 8% which, in the language of compounding, is a HUGE difference. A $100,000 loan at a 2% interest rate, if not repaid a single cent in 10 years, accrues to $121,899. A $100,000 loan at an 8% interest rate, if not repaid a single cent in 10 years, more than doubles to $215,892.

Now it is scary and risky to throw money at "could eventually be profitable" tech companies. Now investors are watching companies burn through their current funding and, when the companies come back asking for more, investors are tightening their coin purses instead. The bill is coming due. The free money is drying up and companies are under compounding pressure to produce a profit for their waiting investors who are now done waiting.

You get enshittification. You get quality going down and price going up. You get "now that you're a captive audience here, we're forcing ads or we're forcing subscriptions on you." Don't get me wrong, the plan was ALWAYS to monetize the users. It's just that it's come earlier than expected, with way more feet-to-the-fire than these companies were expecting. ESPECIALLY with Wall Street as the other factor in funding (public) companies, where Wall Street exhibits roughly the same temperament as a baby screaming crying upset that it's soiled its own diaper (maybe that's too mean a comparison to babies), and now companies are being put through the wringer for anything LESS than infinite growth that Wall Street demands of them.

Internal to the tech industry, you get MASSIVE wide-spread layoffs. You get an industry that used to be easy to land multiple job offers shriveling up and leaving recent graduates in a desperately awful situation where no company is hiring and the market is flooded with laid-off workers trying to get back on their feet.

Because those coin-purse-clutching investors DO love virtue-signaling efforts from companies that say "See! We're not being frivolous with your money! We only spend on the essentials." And this is true even for MASSIVE, PROFITABLE companies, because those companies' value is based on the Rich Person Feeling Graph (their stock) rather than the literal profit money. A company making a genuine gazillion dollars a year still tears through layoffs and freezes hiring and removes the free batteries from the printer room (totally not speaking from experience, surely) because the investors LOVE when you cut costs and take away employee perks. The "beer on tap, ping pong table in the common area" era of tech is drying up. And we're still unionless.

Never mind that last part.

And then in early 2023, AI (more specifically, Chat-GPT which is OpenAI's Large Language Model creation) tears its way into the tech scene with a meteor's amount of momentum. Here's Microsoft's prize pig, which it invested heavily in and is galivanting around the pig-show with, to the desperate jealousy and rapture of every other tech company and investor wishing it had that pig. And for the first time since the interest rate hikes, investors have dollar signs in their eyes, both venture capital and Wall Street alike. They're willing to restart the hose of money (even with the new risk) because this feels big enough for them to take the risk.

Now all these companies, who were in varying stages of sweating as their bill came due, or wringing their hands as their stock prices tanked, see a single glorious gold-plated rocket up out of here, the likes of which haven't been seen since the free money days. It's their ticket to buy time, and buy investors, and say "see THIS is what will wring money forth, finally, we promise, just let us show you."

To be clear, AI is NOT profitable yet. It's a money-sink. Perhaps a money-black-hole. But everyone in the space is so wowed by it that there is a wide-spread and powerful conviction that it will become profitable and earn its keep. (Let's be real, half of that profit "potential" is the promise of automating away jobs of pesky employees who peskily cost money.) It's a tech-space industrial revolution that will automate away skilled jobs, and getting in on the ground floor is the absolute best thing you can do to get your pie slice's worth.

It's the thing that will win investors back. It's the thing that will get the investment money coming in again (or, get it second-hand if the company can be the PROVIDER of something needed for AI, which other companies with venture-back will pay handsomely for). It's the thing companies are terrified of missing out on, lest it leave them utterly irrelevant in a future where not having AI-integration is like not having a mobile phone app for your company or not having a website.

So I guess to reiterate on my earlier point:

Drowned rats. Swimming to the one ship in sight.

In a year we’re going to look back and realize we were too hard on ourselves just like we do every year and curse ourselves for not learning the gentle hand of our grandmother and how her view of us never changed even when she saw the worst of us she still remembers we are still that sweet child she met so many years ago

During the most poor and homeless period of my life, I had a lot of people get angry with me because I spent $25 on Bath and Body Works candles during a sale. They couldn’t comprehend why the hell I would do that when I had been fighting for months to try and get us on our feet, afford food, and have an apartment to live in.

Those candles were placed beside wherever I slept that night. In the morning, I would move them and set them wherever I’d have to hang out. At one point I carried one around in my purse - one of those big honking 3-wick candles. I never lit them, but I’d open them and smell them a lot.

I credit that purchase with a lot of my drive that got me to where I am today. I had been working tirelessly, 15+ hour days with barely any reward, constantly on the phone or trying to deal with organizations and associations to “get help at”. It’d gone on for almost a year by the end of it, and I was so burnt out, to the point that I would shake 24/7. But I could get a bit of relief from my 3-wick “upper middle class lifestyle” candles. They represented my future goals, my home I wanted to decorate, and how I would one day not be in this mess anymore.

When we moved into the apartment, and our financial status improved, I burned those candles every single day. When they were empty, I cleaned them out, stuck labels on them, and they became the starting point of my really cute organization system I had ALWAYS planned to have.

So whenever I hear about someone very poor getting themselves a treat - maybe it’s Starbucks, maybe it’s a home deco item, maybe it’s a video game… I don’t judge them. I get it. I get that you can’t go without anything for that long without it making you go crazy. You need to pull some joy, inspiration, and motivation from somewhere.

Pro-writing tip: if your story doesn't need a number, don't put a fucking number in it.

Nothing, I mean nothing, activates reader pedantry like a number.

I have seen it a thousand times in writing workshops. People just can't resist nitpicking a number. For example, "This scifi story takes place 200 years in the future and they have faster than light travel because it's plot convenient," will immediately drag every armchair scientist out of the woodwork to say why there's no way that technology would exist in only 200 years.

Dates, ages, math, spans of time, I don't know what it is but the second a specific number shows up, your reader is thinking, and they're thinking critically but it's about whether that information is correct. They are now doing the math and have gone off drawing conclusions and getting distracted from your story or worse, putting it down entirely because umm, that sword could not have existed in that Medieval year, or this character couldn't be this old because it means they were an infant when this other story event happened that they're supposed to know about, or these two events now overlap in the timeline, or... etc etc etc.

Unless you are 1000% certain that a specific number is adding to your narrative, and you know rock-solid, backwards and forwards that the information attached to that number is correct and consistent throughout the entire story, do yourself a favor, and don't bring that evil down upon your head.

A little advice from someone studying extremist groups: if you’re in a social media environment where the daily ubiquitous message is that you have no hope of any kind of future and you can’t possibly achieve anything without a violent overthrow of society, you’re being radicalized, and not in the good way.

there’s a website where you put in two musicians/artists and it makes a playlist that slowly transitions from one musician’s style of music to the other’s

it’s really fun