The New Year will likely herald interest rate cuts, triggering a fresh new flow of money chasing not only listed tech companies but also unicorns or unlisted tech firms with a valuation of over US$1 billion ($1.3 billion) and smaller start-ups. Nearly two years of interest rate increases have stifled gestation tech ventures, starving start-ups from Singapore to Shanghai and San Francisco. The start of a new normalised rates cycle will help boost funding for emerging technologies, particularly anything related to AI.
In 2023, technology witnessed resilience and rebuilding, encompassing garage start-ups to the mega-cap ‘Magnificent Seven’ global tech giants, including Apple, Microsoft, Amazon, Alphabet, Nvidia, Tesla and Facebook’s parent Meta Platform.
The advent of AI, particularly generative AI chatbot ChatGPT, helped lift all tech boats following a disastrous 2022 when tech was left in tatters after the US Federal Reserve raised interest rates from near zero in March 2022 to 4.25% in December 2022 to stem runaway inflation. The Fed paused in early May after it had raised rates to 5.25% and now acknowledges that inflation is heading back to its 2% target.
