5 Big Tech Trends to Expect in 2023
We recently wrote about some of the major tech takeovers in 2022 and what they said about larger M&A patterns in the industry. We’ve also looked back at seven key developments across the whole tech world this year. But now that the new year is only a couple of days old (where did the time go?), it’s time to look ahead and consider what major trends are coming our way in 2023.
1. AI will boom (even more)
AI is already everywhere, and it’s going to be… well, even more everywhere in 2023. As a quick glance through some of our most recent M&A reports will show, AI and machine learning has permeated all subsectors within tech, optimising the way we work with colleagues, reach out to clients and customers, diagnose diseases, and more. M&A activity certainly reflects how significant AI has become.
For example, our report on the Enterprise Software sector noted major deals such as Volaris snapping up AI-based integrated banking management SaaS firm Datapro Inc, and Microsoft purchasing AI-powered image, text and video content moderation company Two Hat Security. Over in Proptech, meanwhile, we’ve seen Realpage buy real estate AI-based CRM company Knock.
We can expect AI to be absolutely integral to new tech startups in 2023, and to continue to be a major draw for investors and acquirers screening potential acquisitions. “We’re at the point now where if you’re not investing in AI or if you’re on the fence about investing, you’re going to be left in the dust,” Natalie Schibell of Forrester Research recently said. While she was discussing healthtech in particular, the same observation can be made of the tech world in general.
2. Generative AI will start to change everything
Generative AI, which allows computers to almost instantly create images, editorial content, music, and life-like chat, has been such an important innovation that it deserves its very own entry on our list. It first sprang to the public’s attention as a fun novelty, with millions of people sharing surreal, unlikely images on platforms like Midjourney and DALL·E 2 (“Check out my image of Darth Vader riding a unicycle while juggling cats!”). The recent launch of ChatGPT, the chatbot from Dall-E creators OpenAI, has also generated a frenzy of interest because of its uncanny mimicry of human dialogue.
There’s been understandable concern about the impact of Generative AI on the livelihood of graphic designers, artists, copywriters, novelists, composers and coders. But whatever the ramifications of putting creative superpowers at everybody’s fingertips, the fact is that such powers are here – and they’re going to evolve rapidly in 2023. A cash bonanza for Generative AI startups is already underway, with VC investment increasing by 425% since 2020.
3. More of us will enter the metaverse
Earlier in 2022, research by McKinsey & Co revealed that the metaverse could reach up to $5 trillion in value by the end of the decade. 2022 has also seen some very big names enter the metaverse, with Gucci becoming the first major fashion brand to showcase NFTs and other digital wares on the Sandbox platform. Even JP Morgan, which is as legacy as a legacy organisation can be, launched a virtual lounge on Decentraland, declaring that the metaverse “will likely infiltrate every sector in some way in the coming years.”
In 2023 we can expect to see more household names set up their stalls in the metaverse. The mainstreaming of this iteration of the internet will be spurred by advances in VR/AR, and avatars becoming increasingly life-like, allowing users to properly visualise themselves in the digital realm. New headgear releases by the likes of Apple and Meta will accelerate take-up, and the metaverse will play more of a role in workplace training and hybrid working practices. Digital twins – the online replication of everything from skyscrapers to the inner workings of the human body – will also become more widely utilised, with digital twin startups continuing to enjoy interest from investors. (Read our take on digital twins here.)
4. NFT gaming will really take off
A newly published patent by Sony implies that the company is looking to incorporate NFTs as in-game assets. If NFTs are indeed rolled out across PlayStation games, it’ll obviously be a major milestone in mainstream adoption. In any case, 2023 is sure to see NFT gaming mature considerably, with more gamers getting involved in P2E (Play-to-Earn) titles.
As the name implies, P2E gaming allows players to earn digital assets and currency with real-world value by playing games. A recent success story in this space has been Jump.trade’s Mega Cricket League, whose players can compete for valuable NFTs. As noted in our most recent Digital Commerce report, Media, Social & Gaming already accounts for a large chunk of M&A deals within e-commerce, and NFT gaming’s popularity will further boost investor and acquirer interest in this subsector.
5. SaaS platforms will become ever-more niche
Software-as-a-Service platforms have helped companies more easily implement hybrid working structures, optimise collaboration and data-sharing, knock down siloes, and generally digitalise their operations without having to invest in expensive on-site infrastructure or in-house IT specialists.
While horizontal SaaS products like Slack and QuickBooks have become a way of life for businesses in all industries, we’ve also seen a surge in sector-specific, vertical SaaS tools. It’s this latter category which will continue to experience exponential growth in 2023, with startups springing up to provide subscription-based solutions for increasingly narrower niches.
Such “micro SaaS” companies require less funding and fewer resources to establish themselves, with many being launched by side hustlers and solopreneurs. More easily bootstrapped, their highly specialised nature means they can thrive despite the presence of the big industry behemoths, and indeed integrate with those larger platforms. It’ll be fascinating to see how the continuing proliferation of micro SaaS tools will transform tech in 2023 and beyond.