But the big semiconductor fabrication plants, or fabs, are distant memories. Intel closed its last Californian fab in 2008. The same year, long-time rival AMD – whose founder Jerry Sanders once boasted that only “real men have fabs” – spun out all of its plants to a new entity, Global Foundries. None are in California.
The internet further advanced California’s technology halo, but it also helped to detach it from reality. Rather like a cargo cult, VCs wish that the good times of the dot.com era would return.
Social media, with its ability to engineer how people and communities engage, gave chief executives and investors a taste of megalomania. From then on, they were confident they knew how the world would work. Deep and complex problems could be fixed with a quick “hack”.
But the world doesn’t work like software, which can be produced in abundance at a marginal cost close to zero. Many real-world business sectors stubbornly refuse to “scale” in the same way as a Facebook. Just ask WeWork.
On top of this, very often the ideas being bankrolled by VCs were dreadful – more of a reflection of an era of low interest rates, rather than brilliant insights or technological breakthroughs.
The “sharing economy” was clever in identifying under-used resources, like spare rooms, and creating a marketplace for them. However, Airbnb today looks like a conventional business, rather than a paradigm shifting innovation.
As for Web3, which sought to replace the internet’s basic plumbing with exotic software instruments such as crypto currencies and blockchains, that was a triumph of hope over reality. Today, the mania for “artificial intelligence’ also reflects a desperation for the bubble era to return.
Nothing seems to dim chief executives’ appetites for telling us how we should structure society: OpenAI founder Sam Altman suggesting the world should adopt a wealth tax to fund a universal dole is just the latest example.
The greatest irony is that the world has changed, but California’s technology mindset hasn’t.
It’s going to miss out on reshoring, as manufacturing jobs return to the United States. The high energy costs and punitive taxes mean that for once, the revolution is taking place with California as a mere spectator.
