 Salaam, from the People's Dispatch Studios here in New Delhi. I am Siddhanthani and as always you are watching the Daily Debrief. We have been coming to you through the year and since it is the last week of 2022, we decided it is a good time to wind up or round up maybe some of the top stories from some of the important sectors that have been affecting the world in the year gone by or the year that is coming to a close in fact. And we are starting things off by looking at the technology industry, technology space, particularly big tech which has suffered massive reduction in market capitalization compared to a stellar 2021. It's of course had a wide impact on a range of people working in the tech industry as well as allied sectors across the world. We've seen a deepening of the rift between the United States and China, two of the biggest economies in the world and the leaders in both manufacturing as well as higher technology. Joining us for this special episode of Daily Debrief will be our resident tech guru Vapa Sena. Vapa, good afternoon in the studio with us for perhaps the final time at least this year. It's been a dramatic year at least from the perspective of those telling the stories of what's been happening in the tech industry. All kinds of action, collapses, buyouts, takeovers and overall big tech kind of taking a beating after the highs of the previous year and all of that we'll talk to you over the course of this episode about some of the biggest stories of course in the tech industry, starting off with wherever actually you want as maybe the biggest of the big. Right, I think we should start off with what you said right 2021 was the high flying year right for tech stocks and for crypto. I mean and people were making all kinds of wild project projections of projections of crypto going to one million dollar Bitcoin going to one million dollars and the tech stocks just going to the moon and you had even minor tech stocks right the so-called meme stocks which were like just sky rocketing and from that to just within a span of one year where we are in the depths right and kind of this entire space has collapsed. In terms of market valuations right, it's not that the tech industry has like come to an end but their market capitalizations have taken severe beatings. So I think to start off with we start off with the craziest of them all which is crypto which last year we heard about all these marvelous things that are going to happen how money is going to be reborn and NFTs, Bitcoin, Ethereum, Solana and you go on and on and on and even cryptos which are launched as a joke at the peak the entire crypto space was valued at three trillion dollars and now it is less than like 800 billion dollars so it's lost about 2.2 trillion dollars. It started the first big collapse in the crypto space happens I think in the March, April time frame when two coins which are linked right Luna and Terra they collapsed and with them evaporated about 50 billion dollars and at that time it was thought of a isolated thing problem with Terra and Luna which and they had this it was a stable coin as in Terra was a stable, respect to the dollar and the peg broke and it was kind of thought to be this problem of this one group but then we saw this cascading bankruptcies right so after that you had a company called Three Arrows which went down and then Voyager and Celsius all these all these groups effectively going down and because they were highly they had taken these highly leveraged positions and were impacted when Terra went down right then from there we kind of waited for another six months and then we had the biggest crash of the model in FTX and and Sam Bankron Fried and his two companies the FTX exchange and the Alameda research and both of them spectacularly collapsed right within a matter of days and now there are there are these rumors circling circulating around the other big FTX competitor that the another big crypto exchange which is Binance and I think with this we kind of are finally beginning to see the the full thing of what crypto was right instead of been this future of money it was basically Ponzi schemes and outright fraud and and just just people making highly leveraged bets by borrowing from each other by defrauding customers and using customer money to make vile bets and why when it was going up it went up spectacularly and when it's collapsing it's collapsing spectacularly and at the end of the day there is really nothing to back it up right I mean there is no inherent value there is no real business there is no cash flow which backs up this entire space and and you have this money effectively evaporating that's kind of probably the biggest one of them then then there were all these other the so-called meme stocks like stocks like Robin Hood and Peloton and Zoom which we just shot up like to ridiculous valuations right and some of them actually have valid business like Zoom we all use Zoom right it just didn't deserve the kind of valuations which it got and now they've lost like 18-90% of their valuation now if you move from there to the the big tech right these are like companies these are huge companies all trillion dollar companies at one point and they are solid businesses they have been around for more than 10 years and they generate huge amounts of cash but their valuations had gone up so much and now they are falling back and and I mean it's spectacular what is happening to each one of them right Amazon has become the first company to lose a trillion dollars in market cap and if you think about it Amazon's business is probably the the most stable of them all right Amazon is not in one business it is in three major businesses one is it's obviously retail business where it's in a dominant position worldwide then the it's cloud business which is also it's in a dominant position and increasingly it has been in the advertising business right because people as since you're selling your goods on Amazon platform you also would advertise there naturally and that's becoming a big part of Amazon's business and these are big businesses they're not going to go away but it's market it's lost a trillion dollars in market cap you have companies like similar to Amazon Google has lost like close to more than 800 billion dollars Apple has lost 800 billion dollars and these are all like big companies which are not going anywhere but we should go ahead to state things which are slightly different are Facebook meta which has lost 75 percent of its market cap it's lost like I think about 700 plus 700 750 billion dollars right hard to keep track nowadays Facebook is I think not in the same league as other companies right Facebook is a one track pony of advertising on Facebook now the Facebook platform itself is is not going to grow right I mean in fact people are it's a platform which was probably I think it's yeah it's probably on its way down right I mean Instagram and WhatsApp are still going to be very valuable but Facebook itself is probably on the way down and so clearly Zuckerberg sees that and that's why there was just such a hype about changing its name to meta and hyping metaverse which till now has gone nowhere right so I mean in case of Facebook you can understand that it's in a tricky position the other big big name right in these big tech companies is Tesla now Elon Musk has been in the news because more for Twitter right and taking over of Twitter like making an hostile bed which was initially rejected then accepted then Elon wanted to back out and was kind of forced by the courts to finally go through with a 44 billion dollar takeover and then all the controversies right about about the Twitter files and and the Hunter Biden story and probably there is much more to that right I mean the the media is playing up the Hunter Biden story but there is Facebook sorry Twitter did actually suppress many more probably far more impactful news sources and news stories and they were they were in co-host with the US intelligence agencies to suppress these stories especially in the in the Middle East especially things which were which were anti-war and against the US foreign policy but the other side of Musk which is Tesla from where he funded this acquisition of Twitter that Tesla's market cap has gone down by 70 percent right I mean last year Tesla like Tesla was going to the moon Tesla was going to $4,000 share and now Tesla is down in the dumps right and what has happened is Tesla is starting to be treated like a traditional automaker right earlier Tesla was still selling a fantasy and they were priced based on that fantasy and even now it's very highly valued for a successful automaker but it started starting to be treated like that and Tesla is now starting to face serious competition and the competition is all over the world right there's serious competition from the Chinese even American companies like Ford are now coming up with EV vehicles the Koreans Hyundai and Kia are coming up with serious competition and the Europeans right Audi and Mercedes have EV vehicles out so Tesla is no longer kind of the sole player in this EV space so and naturally now they're going to become their valuations are going to be compared with other automakers and then that even the valuation which is there today which is after they have dropped 70 percent is not justifiable if you compare it with the valuations of other automakers so I think that kind of is a broad sweep right what we are saying is the the really speculative place they are probably wiped getting wiped out and never to return which is good because I mean these will I mean basically just outright fraud but even the companies which have solid businesses and solid clash cash flows their valuations are seeing serious cuts as the market kind of adjusts to reality right yeah one of the impacts before we obviously move on to a couple of other subjects would be on small investors those who buy into some of the you know the the skyrocketing valuations and and projections and often you know projections that come that are sponsored by the company that is whose future is being told but apart from that the brunt of of this has been felt by tens of thousands of tech workers across many of these companies how do you see the industry recovering from that and and those involved in tech how do you see what do you see see I think the projections are actually bleak for for tech workers right I mean see what happened was immediately after the the pandemic and when the stimulus money was put in and all these companies started their stocks started going skyrocketing because they said that okay now the physical world is going to come to an end and we are going to always be in this virtual world and go to work and party everything in the virtual world and so so then these tech companies started hiling like crazy right and the the first wave of tech layoffs which we have seen this year that is kind of getting back to normal levels right we still haven't seen deep cuts they are probably going to come next year right as as the evaluations of even the profitable companies have taken severe beatings it's natural that we are going to see deep cuts so so I think the the real pain in the tech sector is probably still to be felt and and I think and next year we are going to see that all right the other big topic that has been also in play through the year has been the the so-called it's not really a war it seems more like a unilateral provocation but but the the challenge that China is is presenting to the US is traditional hegemony over tech and and you know research and development and in this space and what the reaction has been to that so I don't know maybe we can start there or we can go in to a little bit about the challenges that perhaps big tech has been facing from also courts and other regulatory bodies so let's do do the China story first right which is the really the tech war story in some ways it's probably an even bigger story than the the severe thrashing which the tech stocks have taken because you have seen these ups and downs like in the dot-com era we had seen these huge rise in tech stocks and then they collapse and we're seeing it again right but in what is happening in relationship to China and and the sanctions on on the Chinese semiconductor space that has far reaching impact right I mean for the last 30 40 years we have seen this increasing globalization and integration of supply chains and now we are starting to see that a deal like this beginnings of deglobalization and and fragmentation of the supply chain and and it's kind of driven by the American angst at the rise of China right and kind of the American hegemony on on industry and and and it's economic power is driven from this this been the tech leader and now that is that it is getting seriously challenged America things that the way to kind of control that is by trying to stop China from growing and and that's what the tech sanctions are really targeted at and that announced the first batch of sanctions in last year but this year they've announced far more restrictive sanctions right it pretty much covers export of any high-end chips to China and chip making equipment right so last year they had for example amongst the chip making equipment the kind of the the most prominent chip maker is ASML right which makes these these the the the most advanced chips the the seven nanometer and the five nanometer and the three nanometer chips are used are made using ASML machines and so the most advanced of ASML machines is called what is the uses what is called the UV technology and that they had banned last year right the and the that was easier for us to ban because that uses American technology right so so the there so because ASML kind of licenses the American the the key UV technology from American companies America basically said that you can't use our technology and so they could ban it the second wave of sanctions that have come they are now asking ASML to not just stop not just not sell UV but not sell even the previous generation machines which are called the UV machines right and that has severe impact for China but it also has severe impact for for companies like ASML right because like 30% of ASML sales are to China and so ASML is now kind of resisting that right saying that like UV doesn't have American technology right so they should be able to sell UV machines and and they kind of resist and we are seeing this from all American allies right so the American allies are not willing to go along with it because it it represents significant setback to their revenues because China consumes like between 30 to 40% of the global semiconductor chips which are produced in the world right and so if you stop these companies from selling to China you are immediately seeing a cut of revenues of 30 40% which is which will have huge impact on the on all of these companies and and so you are seeing Taiwanese Korean Japanese the Dutch all these countries really dragging their foot on going along with the next generation of these sanctions from from the US and even the American semiconductor companies like NVIDIA and Intel they are like raising a ruckus at this because this is this effectively if carried out in full this would mean kind of the worlds the the tech world splitting into this two separate zones right which don't which don't mix which is the which don't like share knowledge and it would be a huge setback for the tech industry and for the for the global economy as a whole so so we will see how it progresses and so that is the direction in which you you see things proceeding at least from from whatever evidence we have so far so see clearly America US wants to push that right now whether they will be successful in doing that that remains to be seen because the their allies like I said are dragging their foot right and even you American companies are not happy with this and and they're they're one of the fairly logical counter arguments is that if you stop doing this you are effectively depriving these companies of 30 to 40 percent of their revenues and and this being such a fast moving space you need to constantly be innovating and and putting and investing in research and development and if you if you then take like 30 percent 40 percent of their revenues away then that is that much less investments you can put in future research while what will force China to do is it will force China to turn self-sufficient and China the Chinese government has recognized this and they are they have this this the like making China kind of initiative where they are hoping to be by 2025 they they they are hoping to be like 40 percent self-sufficient and by a future date by 2030 I think it's like 70 percent self-sufficient and so these kinds of sanctions will only accelerate China's self-sufficiency right so in the long run it's going to come back to bite the US right so it remains to be seen how much they will push it and how much they will back off but we are in a precarious situation all right we'll we'll call it a a wrap on that note Baba good to have you through this year talking tech with us on daily debrief right we hope you enjoyed the first of our year-ending special episodes on daily debrief we'll be back tomorrow talking about the energy sector and how various global crises have impacted how we consume what we consume at what price we consume it and of course looking also at the future of the energy sector in the context of human induced climate change until then of course we invite you as always to head to our website peoplesdispatch.org for details on these stories as well as all of the other work we do and of course don't forget to follow us on the social media platform of your choice see you tomorrow goodbye