The biggest technology breakthrough of 2021 was the deployment of medicines, not machines. The COVID-19 vaccines saved countless lives and began our nation’s slow and halting return to normalcy (let’s hope).
But there’s been plenty of action on the digital front. We became still more dependent on tech giants like Facebook, Amazon, and Google, and still more suspicious of their motives. Cyber attacks and engineering blunders showed how little it takes to cripple our most vital networks. A kink in the microchip supply chain became a major threat to economic revival. Some online speculators raked in millions by ambushing unsuspecting hedge funds, while others poured billions into NFTs, a weird new way to stake a claim on digital art.
In April, Microsoft said it would pay nearly $20 billion to acquire Burlington’s Nuance Communications, which makes speech recognition and artificial intelligence software for many industries, but especially for health care. It’s the second-biggest acquisition In Microsoft’s history, behind the $26 billion it paid in 2016 for LinkedIn. Microsoft said that Nuance technology will open the door to new health care markets worth up to half a trillion dollars per year.
Boston’s Ginkgo Bioworks, which uses customized DNA to engineer new kinds of foods, pharmaceuticals, and cosmetics, was taken public by Soaring Eagle Acquisition, a special purpose acquisition company, or SPAC (yes, another big trend). The deal set Ginkgo’s value at $15 billion, and raised $1.6 billion in fresh capital for the company.
And don’t forget Toast, the Boston company that makes restaurant management software and devices. Toast went public in an old-school initial public offering in September, raising $870 million and setting the company’s market value at $20 billion.
But surely the year’s most memorable tech finance story was the tale of Wilmington stock trader Keith Gill, better known as “Roaring Kitty.” He’s the guy who decided to invest $53,000 in video game retailer GameStop, when its stock was hammered by Wall Street short sellers. Gill used social media messages and videos to bring other investors on board. Suddenly, GameStop stock soared, Gill and other investors made millions, and the short sellers lost billions. All quite legal, and quite entertaining as well.
In a few years, we may decide that the biggest local tech story of 2021 came out of Commonwealth Fusion Systems of Cambridge. In September the company demonstrated a new kind of electromagnet that could make it possible to build nuclear fusion reactors — a pollution-free source of unlimited electricity. It sounds like a pipe dream, but investors have staked over $1.8 billion on the concept, and Commonwealth has promised a working fusion reactor prototype by 2025. It’s all part of a local resurgence in climate-tech companies.
Supply chain woes
But the tech world’s a lot bigger than Boston. Which is why we spent the year fretting over a shortage of microprocessor chips that’s hampered the manufacturing of everything from computers to cars to home appliances. The lack of chips is stifling global economic growth; one research firm, AlixPartners, estimates that the worldwide auto industry will lose $210 billion in revenue, because fewer chips means fewer new cars to sell.
The shortage brings good news too — at last the United States is getting serious about building more chips right here. Intel, Taiwan’s TSMC, and South Korea’s Samsung all announced they’re spending tens of billions on massive new US plants. But it’ll take at least two years to bring the new production on line. So you’ll have to wait for that new refrigerator.
The fall of Facebook
Facebook changed its corporate name to Meta, supposedly to highlight its big move into offering virtual reality services. But one can’t help suspecting that it was partly a distraction from recent embarrassments.
There was the disastrous October outage in which all of Facebook’s online services collapsed for six hours. Not just Facebook itself, but also Instagram, WhatsApp, and Oculus. Since billions worldwide use these services, it was possibly the largest communications breakdown in history, and a warning that we depend too much on Facebook for our own good.
But it got worse for Facebook when former employee Frances Haugen released a trove of documents suggesting that the company knows its networks are used to spread false information, incite violence, and aid in human trafficking. Facebook says it’s doing its best to clean them up. But the release of the “Facebook Papers” makes it more likely that governments worldwide will put new restrictions on social media companies — restrictions that could amount to censorship of free speech.
Cryptocurrencies like bitcoin continued to soar. But so did a new kind of investment vehicle based on the same underlying technology. A nonfungible token, or NFT, is like a digital stamp attached to a specific digital work of art, like a photograph, video, or painting. The NFT proves the identity of the artist and the current owner, making it easy to securely buy and sell works of art.
Hardly anyone had heard of NFTs at this time last year. But according to market research firm DappRadar, the global trade in NFTs topped $23 billion in 2021. And the sector has taken on a life of its own.
As for cybersecurity, 2021 was pretty much like 2020, only worse. Springtime brought two of the most dangerous ransomware attacks ever. Long lines formed at gasoline stations after attackers shut down Colonial Pipeline, a company that provides fuel to much of the southeastern United States. Another attack halted production at JBS Foods, one of the nation’s leading meatpacking companies. Both attacks demonstrated how a criminal gang or foreign power could cripple US infrastructure with a few keystrokes. (Local companies are tracking these threats.)
Just in time for Christmas, things got even uglier. Blame it on a simple program called Log4j that’s embedded in countless computer networks. Newly discovered flaws in Log4j can enable computer criminals to easily seize control of a server or a whole network. They could steal vital information, or cripple any number of sensitive systems. And so every institution with a data network must test every bit of its software, to identify and destroy every Log4j bug. Or else.
Happy New Year, all.