TechScape: The end of the ‘free money’ era

In this week's newsletter: From massive venture capital investment to sky-high salaries, the days of constant growth backed by low-cost loans may be over

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For more than a decade, the tech industry has been defined by two economic zeros. The zero interest rate policy" (ZIRP) across the western world saw the price of money plummet, letting startups run at a loss for years and giving investors massive appetite for risky bets that might pay off in a big way. At the same time, the zero marginal cost" of the software industry gave outsized returns to effort, allowing for situations like WhatsApp: 55 employees serving 420 million users and selling to Facebook for $19bn.

But both those conditions are coming to an end. Governments around the world have raised interest rates in a desperate attempt to keep post-pandemic inflation under control, while the rise of AI technologies threatens the production model that brought the sector to its current dominance. And because of that, the next decade could be very different from the last.