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Major business and technological trends of 2022

6 min read

From: allin

Introduction to the Bestie Awards

At the end of 2022, the “Bestie Awards” were held to recognize the biggest winners, losers, and other categories in various domains, including business and technology [00:00:08]. This article compiles the key trends and events highlighted during this year’s awards.

Global Macro Shift

A significant global macro shift was identified as the most important business story of 2022 [00:20:45]. This shift involved a complete regime change, impacting even Japan, which finally yielded on negative interest rates and raised them [00:21:07]. This indicates a worldwide sea change in how risk is perceived [00:21:17].

Winners in Business

  • Defense Stocks: Companies like Lockheed Martin (up 40%), Northrop Grumman (up almost 40%), Raytheon, and General Dynamics (up almost 20%) saw significant gains due to the ongoing war in Ukraine [00:23:47]. The depletion of U.S. stockpiles of weapons like javelins and Stingers ensures continued good business for these companies [00:24:18].
  • Oil and Gas Companies: Larger oil and gas companies saw their equity value increase by about 47% year-to-date in public markets, benefiting from supply constraints and the conflict in Ukraine [00:25:32].
  • Investors Understanding the Capital Asset Pricing Model: Individuals and organizations that understood the Capital Asset Pricing Model (CAPM) and its implications in a rising interest rate environment were able to profit [00:27:06]. This understanding allowed for strategic placement of money in sectors like defense, energy, consumer goods, and staples [00:27:50]. Macro books and algorithmic implementations of CAPM performed exceptionally well [00:28:01].
  • OpenAI / Microsoft (ChatGPT): ChatGPT was identified as a major business winner due to its ability to generate human-like text responses, posing an existential threat to Google’s search business model, which relies on ad clicks [00:28:31]. Microsoft is expected to release a search engine with OpenAI, potentially impacting Google’s franchise [00:29:35].
  • CEOs who cut costs: CEOs who responded to the new economic regime by cutting costs, getting leaner, and extending their company’s runway were commended [01:43:24]. Specific examples include the CEO of Klarna and Checkout.com [01:45:32].
  • Warren Buffett: Recognized as an extraordinary leader and capital allocator who remains steadfast regardless of market conditions, avoiding active roles in ranting about markets or politics [01:45:48]. His investment in Occidental Petroleum, which performed exceptionally well, highlighted his success [01:46:41].
  • Cash Flow Positive Companies: CEOs of companies like Airbnb and Uber, who were previously “money losers,” turned their focus to free cash flow and profitability [01:47:04]. Airbnb became a “money printer” while continuing to grow quickly [01:47:17].

Losers in Business

  • Big Tech: Identified as a “huge loser” on a dollar basis [00:30:34]. The “crowded trade” in big tech broke, regulators began targeting these companies, and the innovation cycle started to change as companies couldn’t outspend without scrutiny [00:31:09].
  • Crypto / FTX: Crypto was widely predicted to be and was confirmed as a major loser in 2022 [00:29:55]. The collapse of FTX was a major revelation of fraud and scamming, revealing systemic laziness and bias among investors and journalists [00:31:48]. The SEC is expected to pursue more prosecutions in the crypto space [01:00:00].
  • Bob Chapek (former Disney CEO): His tenure was marked by a disastrous fight with Florida Governor Ron DeSantis and internal undermining by Bob Iger, leading to his ousting [00:33:01]. Chapek struggled with talent relations and consolidating P&Ls [00:37:02].

Business Surprises

  • Elon Musk’s Acquisition of Twitter: This event was a major surprise, transforming from a “whimsical fantasy” into a “cold-hearted reality” with significant drama and court battles [00:43:03]. The rapid cost-cutting, demand for return-to-office, and subsequent impact on Silicon Valley were also surprising, with many CEOs and VCs looking to Musk’s approach as a model [00:43:31].
  • Jerome Powell and the Fed’s Hawkishness: The unwavering hawkish stance of Jerome Powell and the Federal Reserve on inflation was unexpected [00:44:26]. Powell maintained that the Fed would raise rates higher and keep them longer than anyone expected to combat inflation, despite political and market pressure [00:45:05].
  • Adobe acquiring Figma for $20 billion: This high price tag in the prevailing economic environment was considered a significant surprise [00:45:34].
  • Meta stock collapsing: The significant drop in Meta’s stock value was a major business shock [00:47:53].

Science Breakthroughs

  • Net Energy Gain from Fusion (National Ignition Facility): While described more as a milestone than a breakthrough, the demonstration of net energy gain in plasma fusion at the National Ignition Facility was a significant event [00:51:30]. This has catalyzed a change in investment, with a 40% increase in fusion startups and capital flowing up to $10 billion annually [00:51:57].
  • CRISPR-edited T-cells curing leukemia: A 13-year-old girl in the UK was cured of heretofore incurable T-Cell Acute Lymphoblastic Leukemia using CRISPR-edited transplant T cells [00:55:00]. This was hailed as an “unbelievable breakthrough” for human longevity and quality of life, demonstrating the potential for base editing to eradicate cancers [00:55:57].
  • AlphaFold 3: This technology, which achieves “almost near perfect accuracy” in protein folding, was cited as a best new tech [02:02:26].

New Technologies

  • ChatGPT / OpenAI: See “Winners in Business” section above. Its ability to elucidate the potential of machine learning tools and generative AI was highlighted [02:01:47].
  • Fusion Startups: These were identified as a long-term winner due to significant breakthroughs [02:02:02].
  • Age of Austerity: Startups and investors are returning to reality, with a focus on austerity and profitability after a period of excess [02:02:41].
  • Decreasing Marginal Cost of Energy: The marginal cost of energy generation and storage is now in the low single-digit pennies per kilowatt-hour [02:02:52]. This trend is expected to make energy free and abundant, leading to a “massive peace dividend” and rewriting foreign policy and national security over the next decade or two [02:03:00].
  • Narrator Economy: This emerging trend, enabled by generative AI tools like ChatGPT and DALL-E, allows people to “narrate” the product they want created and have it generated on the fly [02:03:41]. This is seen as a powerful mind shift that will change behavior, entertainment, and business operations [02:04:01].
  • Growing Realization of Corporate Media Failure: There is a growing understanding that corporate media often presents an agenda rather than the truth, leading more people to opt for independent media [02:04:23]. Elon Musk’s initiative to hold corporate journalists to the same standards as regular citizens on Twitter was seen as a significant step [02:04:30].
  • Worst Trend: Government Collusion with Big Tech in Censorship: The “disturbing dystopian relationship” between government bureaucrats (FBI, DHS, Pentagon) and “censors” at big tech companies like Twitter was highlighted by the “Twitter files” revelations [02:06:02]. This growing authoritarianism at home is a concern [02:06:40].
  • Worst Trend: Interest Rate Mania: The obsession with whether the Fed acted soon enough or late enough, and the belief that interest rates alone drive business success or failure, was identified as a “flawed assertion” [02:06:54]. The emphasis should be on solid investing and business building, rather than a return to “drunken days” of low interest rates [02:07:35].

Conclusion

2022 was a year marked by significant shifts, both economically and technologically. While some industries and business models thrived, others faced unprecedented challenges. The rise of AI technology and the re-evaluation of media landscapes point to dynamic changes that will continue into the future.

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