It seems that those heady days are a thing of the past. The markets have noticed this. Last week marked the end of the worst month the Nasdaq has had since 2008. On Friday, April 29 alone, this index fell more than 4%, extending its monthly losses to more than 13%. Netflix, a darling of “FAANG” just a few months ago, saw its stock plummet by more than 30% after an earnings report showed the movie streaming company had lost subscribers. In Friday’s carnage, Amazon shares fell 14%, the largest one-day drop since 2006 after the company reported its first quarterly loss in 7 years. The FAANG group of Facebook, Apple Amazon, Netflix and Google lost more than $ 1 trillion in market value in April alone.
Big Tech has started to transform. Former Facebook Inc, now renamed Meta Platforms Inc, is trying to transform itself into all things virtual, but struggling to take off. It is building virtual reality goggles called Nazare, but the project has been plagued by arduous efforts to develop custom chips and a bill of materials worth thousands of US dollars. However, the hype around the “metaverse” has begun, as has serious research work in this emerging space. Researchers at Carnegie Mellon’s Human-Computer Interaction Institute (also called FIG or Future Interfaces Group) have discovered how to make users experience sensations in their lips, tongue and teeth that mimic a real-world kiss.
Strange as it may seem, there are early adopters of anything. Futurism.com reports that a Japanese man who married a hologram can no longer speak to his life partner due to a software glitch. Instead of liking the words in soft tones, he received a “network error”. Akihiko Kondo married a hologram in 2018. The hologram is a representation of a famous Japanese virtual star named Hatsune Miku. Gatebox is a machine that allows users to interact with fictional holographic characters and chat with them. According to the Japanese newspaper The Mainichi, the startup that makes Gatebox had only made a “limited production model” of Hatsune Mike. At the height of the pandemic, the startup announced it would shut down its virtual Miku service, leaving Kondo deprived of his life partner.
Nazare, Miku’s hologram, and Carnegie Mellon’s new FIG “fucking machine” are just the first silly versions of what the Metaverse has in store. I shudder at what might happen as the metaverse evolves and scientists and big tech companies come up with other ways to introduce us to such uses of virtual reality.
Social networks like Facebook and Twitter have long tried to use the alibi that they are simply “free speech” platforms. Elon Musk’s acquisition of Twitter could further strengthen this alibi. He went so far as to call himself an “absolutist of free speech”. I think he will have a hard time managing his new toy. Managing free speech on a platform is a very different (and significantly more difficult) proposition than playing drums, and then there’s the question of whether his funding will hold up. If last week’s equity crisis continues, the debt financing he uses by providing his Tesla stock as collateral could suddenly become much more expensive for him (assuming, of course, the financing materializes).
Social media platforms like Facebook and Twitter have no journalistic standards. Any user can say anything at any time on any subject with little regard for the truth. Everything is an opinion, but not clearly labeled as such. Therefore, much of the “news” available on these platforms is partial. The unscrupulous sale of users’ personal information and interference from hostile foreign regimes can also potentially influence the outcome of the elections. Worse still, the spread of false and harmful news can fuel short-term violence.
With Facebook and others now betting on their future in the metaverse, the “we’re just offering a platform” defense won’t cut it. Today it is just freedom of expression. The virtual clothing of the Metaverse, like the aforementioned kissing contraption, will inevitably expand. What is just a hate messaging problem on social media platforms could turn into a world where users could actually commit acts of physical violence on other users. Anyone can guess what the effects of this might be.
In my opinion, Big Tech companies have already proven, over and over again, that they are unable to control themselves adequately. Even when they make grandiose public announcements, such as the removal of facial recognition technology in 2020 in response to protests that the technology regularly discriminates against people of color, they are in response to public pressure. In any business, profit is always the reason. It is clear to me that virtual reality regulation is necessary, and fast. Physical interactions cannot be robotic without tight control.
Siddharth Pai is the founder of Siana Capital, a venture capital fund management firm focused on in-depth science and technology in India