Metaverse winter sets in

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With help from Mohar Chatterjee

It’s been a bumpy road for the metaverse over the past few months.

First Meta, the ambitious project’s most prominent champion, slashed more than 10 percent of its workforce in November — only for the news to break just today that they’re planning additional cuts. (The company also reduced its Quest Pro headset’s price by $400 a few weeks ago.) Then Microsoft cut its VR staff to the bone. Pico, TikTok parent company ByteDance’s VR arm, laid off more than 200 people in the past week. Chinese giant Tencent abandoned its plans for a VR headset entirely.

Developing the metaverse is a capital-intensive project, covering everything from the devilishly tricky business of hardware development to beefing up the computing and networking infrastructure that would support it. That means even some of the tech’s most fervent evangelists and architects are adjusting their expectations amid the tough economic headwinds facing the tech industry.

“The metaverse is a long-term play,” said Zvika Krieger, a consultant and former director of responsible innovation at Meta. “Unless you have a lot of money to burn, like Meta, you’re not going to stick with it during a market downturn. When things are flush everyone likes shiny new ideas, but when you have to prioritize it’s going to be the first thing on the chopping block.”

Case in point: The aforementioned layoffs — and the recent conquest of the tech and media discourse by an even shinier, newer idea in generative AI models.

But companies like Meta that have money to burn can throw their weight around in other ways that matter, like building institutions meant to ensure said “long-term play” remains in motion. The XR Association, an industry group featuring board members from Meta and Microsoft, published this week a remarkably sanguine “State of the Industry Report” that touts its growing membership and clout, including successfully lobbying for the inclusion of “immersive technology” as a research focus area in this year’s CHIPS and Science Act.

“This recession is considered to be a short-term thing, not a structural change or a real recession in any kind of big way,” Edwina Fitzmaurice, Global Chief Customer Success Officer and head of metaverse efforts for the consulting firm Ernst & Young, told me. “People are sticking the course on [metaverse] strategy, while looking for short-term opportunities or adjustments.”

Most of those adjustments have to do with cutting back on hardware development. When the news broke last month that Apple, as much a product design firm as a technology company, was scrapping plans for lightweight augmented reality glasses in favor of a lower-cost mixed-reality headset, it set off serious alarm bells: If Apple can’t get this right, what hope does the rest of the industry have as economic growth slows?

“My guess is Apple just realizes that VR is a technology whose time hasn’t arrived yet,” Krieger said. “[Meta’s] Quest headset is good, but I don’t think Apple would feel comfortable releasing something like the first Quest, probably not even the Quest Two; it’s just not a seamless user experience, which I think from the Apple perspective would degrade the brand.”

The refrain that hardware is, well, hard, comes up constantly in conversations about the state of the metaverse and pace of its development. (See metaverse evangelist Matthew Ball’s lengthy essay on the topic published last month.) That’s led to some surprising moves from the companies jockeying for position in it: After the aforementioned shutdown of Tencent’s VR headset project, the Wall Street Journal reported yesterday that the company is in talks with Meta to sell the Quest in China.

It would be Meta’s most significant consumer-facing business in China since the nation banned Facebook in 2009, no small feat given the currently hostile tech and industry climate between the country and the United States.

“There are choices that companies have to make about going with one or the other [between the U.S. and China],” Fitzmaurice said.

Of course Meta, as the prime mover in this nascent industry, can afford to at least attempt to have it both ways. But smaller fish won’t likely be able to resist the pressures of geopolitics any more than they can spend freely on hardware R&D during a minor downturn — meaning Meta will likely remain at the head of the pack as long as Mark Zuckerberg continues pursuing his metaverse vision.

amazon's ai moves

Amazon’s been working on an AI model that outperforms GPT 3.5 — at least according to some early metrics.

There’s no big press announcement yet, but Amazon Science has released a large language model on Github that outperformed GPT 3.5 by 16% on a standard set of science questions and answers — like whether two magnets will attract or repel each other in a certain orientation — that Amazon researchers benchmarked their model against. (If you’ll recall, GPT 3.5 is OpenAI’s most recent AI release, although GPT 4 is close on its heels).

And while there’s no slick user interface for the Amazon AI (yet), if you’ve got the chops and the inclination, you can play around with the model yourself.

So what sets Amazon’s contribution to the world of large language models apart from the current state-of-the-art? Well, given a question, the Amazon model can incorporate information from both text and images to formulate an answer. The Amazon model is less prone to “hallucinations,” compared to previous attempts to incorporate visual features into smaller language models, Amazon AI researchers reported in the accompanying research paper.

Amazon Science’s reasoning for incorporating images into the complex reasoning process for large language models is pretty straightforward: “Imagine learning a textbook without figures or tables.”

The next thing to look out for is how Amazon’s AI performs on generalized tasks and queries — not just research benchmarks. — Mohar Chatterjee

the crypto frontier

Why has Wyoming become a locus for a loose collection of doom-minded tech (and political) entrepreneurs dissatisfied with American life and politics?

James Pogue answers that question in a feature published in Vanity Fair yesterday about “The dissident fringe, where the new right meets the far left, and everyone’s bracing for apocalypse.”

“Tech executives and crypto investors are creating secretive groups to help people “exit”—a term that has taken on almost mystical significance in some circles recently—from our liberal society, tech-dominated lives, and fraying system,” Pogue writes, going on to describe a secretive group formed by “The Network State” author and VC Balaji Srinivasan which is planning for a “post-state future.”

It’s well-reported, freaky stuff, in keeping with Pogue’s previous reporting for the magazine on the “New Right.” And it’s increasingly creeping into mainstream politics: Pogue describes how the anti-growth agenda of the environmentalist writer Edward Abbey, seemingly on the lips of everyone in this new community, was repeated to him by former Senate candidate Blake Masters during his campaign last year. — Derek Robertson

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Stay in touch with the whole team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]); Mohar Chatterjee ([email protected]); Steve Heuser ([email protected]); and Benton Ives ([email protected]). Follow us @DigitalFuture on Twitter.

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