I think it's a consequence of higher interest rates drying up VC money, meaning that tech companies now have to actually be profitable, rather than just grow.

If the plan was grow now, profit later, then later has come

Venture capital has shifted very quickly from companies HOSTING content to companies SCRAPING content (LLM’s). This means renting compute is now very expensive and moving into the hands of ‘AI’ companies. It’s like trying to fly a plane while monkeys are tearing the wings of.

It's because the 2024 election is coming up.

Others have basically captured it, but my read is a massive change in the overall risk profile held by venture capital firms. The time of reckoning has come, and it’s time for everyone’s (or at least VCs’) favourite three letters: ARR (Annual Recurring Revenue).

The last twenty years, we’ve seen this sort of spray-and-pray model, where 99 bad investments could be offset by 1 “unicorn”. The risk appetite seems to have shifted largely because 1.) there’s a higher volume of early stage concepts (so there’s more bad ideas), and 2.) there’s either fewer unicorns, or the unicorns that mature are ultimately less valuable.

Crunchbase put out a good analysis of the current trend of global venture dollar flow:

The Party’s Still Over: The VC Downturn In 6 Charts

You can read news from various outlets - some say it’s a post-pandemic correction. Some say it’s because labour is too expensive. But the bottom line is that VCs aren’t willing to spend money on “users-in-lieu-of-revenue” like they once were, and I honestly don’t blame them. There were a lot of really, egregiously stupid ideas coming out of SV, and their wax wings melted. sad_trombone.mp4

Adam Kotsko summed this entire phenomena up nicely:

No tech burst.

It's just a cold recession. No one is admitting it, including consumers who keep spending away savings.

But companies are aware of it enough they are tightening purses preparing for harder times ahead.

Of course, it's a self-fulfilling prophecy.

If everyone makes their products worse chasing this quarter's dollar, and people leave, those companies are going to have a harder time.

Especially as it becomes easier and easier to compete against them at scale.

Just wait until new feature requests and bug reports for something like Lemmy can be handled within moments by AI at dirt cheap pricing.

A very interesting future awaits around the bend.

free money has dried up, now they need to monetise your habits.

Because usually the greed, money and power corrupts, no matter how good you are in the beginning.

i e read this mostly because of AI…

Short answer : Enshittification.

Long and brilliant explanation here : https://www.wired.com/story/tiktok-platforms-cory-doctorow/

All of a sudden?

My dear, sweet summer child.

The tech companies tend to follow the leader on unpopular actions. The first-mover bears the brunt of the backlash, allowing the copycats to implement the same policies without the same flak. Witness Twitter introducing fees and then Facebook following suit. Witness Twitter banning third party apps and Reddit... you know the rest.

I'm not sure YouTube ever wanted you using adblockers.

Not really "all of a sudden", this has been a long process. The often repeated enshittification thing is fully valid. The short version is:

• start out
• grow and expand as much as possible
• bring in advertisers
• make everyone depend on your service
• abuse your powers, since everyone "needs" your service

Google, Amazon, Facebook, Twitter are the more obvious culprits, but every big tech company does something similar, one way or another, even hardware companies like Intel or Nvidia

SOXL - an EFT for US semicondutor companies is doing well.

YouTube is blocking adblockers? News to me

As discussed here:

Honestly they do it so consistently that i’m starting to wonder if they have a choice.

A common way to do things for tech startups is that they get venture capital funds, use them to run the business at a loss hoping to acquire market dominance, and then use market dominance to turn a profit. I think a lot of tech startups that we know are currently in phase 2, meaning they’ve thrown money out the window for years and are now trying to recoup their investments.

Also, Reddit wants to go public and Twitter already is. This is relevant because investors are animals, all they see is short-term profit, and they use their voting power to make the company behave that way.

There’s a common thread between both my theories: it’s shareholder capitalism. I say this as a lifelong shareholder myself, shareholders ruin everything.

They've got you - you're addicted and/or locked in and the hastle of moving to alternatives is too great. The short answer is : 'They no longer need to be favorable, they have you, your data, and your friends and it's too much effort to go somewhere else'

It’s called Enshittifiction

https://en.m.wiktionary.org/wiki/enshittification

We're not people to them, just part of a product. Why do anything more than absolutely necessary to keep the money flowing in? Save a fraction of a penny on bandwidth, earn another fraction by selling more complete data and ad views. Multiply that by the number of users and if enough will tolerate it, somebody at the top can buy a shiny new yacht.