The Big Tech Winter is a story of the collapse of venture investment since the US Federal Reserve decided to raise interest rates in an effort to reduce ‘excess savings’ and motivate people to apply for jobs. Some signs that VC activity is picking up in 2023, but the interest has moved from SaaS to AI - 20% of US VC capital is now allocated to startups in this field. This means big tech winter continues, because AI startups don’t hire engineers with this investment, but buy compute with it.
