Dear Reader,

The world moves quickly and you have to keep on making choices. I guess we all know that, but in the high tech industry, those choices move billions of dollars and affect thousands of lives. In some ways, they affect the culture and history of the whole planet. We like to think that those choices are made with lots of analysis – and maybe they are, but it does seem sometimes that a lot of this is about tech billionaires chasing rabbits and living out their sci-fi fantasies.

This past month, Meta announced massive layoffs in their Reality Labs, the division dedicated to building the company's vision of "the metaverse." Reality Labs was launched in 2020, with much hype of course (hype being the rocket fuel for this business). The company we used to call Facebook even changed its name to reflect its belief in this vision of a metaverse, which was going to be a whole way of life – gaming, conferencing, social media – based on an all-encompassing vision of a future lived out through virtual reality.

Reality Labs' recent loss of $4.2 billion in a single quarter appears to have spurred Meta into taking action. Still, they aren't exactly pulling the plug. Work will continue on smart sunglasses and other projects within the lab's purview, but some of the bold ideas that defined the metaverse, such as business uses for headsets, Meta Horizons Workrooms, and Meta Horizon services, are getting scaled down or eliminated.

What is clear is that Meta is letting go of the grand metaverse vision that has shaped the company for the past five years. Some of the reasons are financial (they have apparently lost more than $70 billion on virtual reality projects), but the other thing is that now they have a new rabbit to chase: AI.

The prospect of a company chasing one rabbit then stopping in mid-chase to chase a different rabbit might not inspire investor confidence, but it is so endearingly human I can't stop myself from pausing on the image. I must admit, the virtual reality gold rush seemed even weirder and spacier than most of the fantasies the tech titans get themselves lost in. I remember when the Second Life virtual world got started; they had a lot of venture capital money and poured it into the vision that this was the new way to do business – that every company would need to have its own virtual island in the virtual world and entertain their clients there. They churned up a lot of attention, encouraging "experts" to write about how this was a lot more than just putting yourself in the SIMS game. But the rest of the world didn't follow them into this virtual Eden.

Second Life still exists, but it is a nichey thing, populated by devotees who go there to play, not to redefine the human experience. All this happened years before Meta unleashed their own virtual revolution. Why did they think it would end differently? Because they had better headsets?

As Meta and the rest of the industry gear up to chase the AI rabbit, I must confess, this all seems like déjà vu. We've seen so many of these lost tech juggernauts (jugger-nots?). It reminds me of the early World Wide Web gold rush, or the companies that spent billions trying to enter the mobile phone space, or even all the Linux startups earlier this century who were going to figure out how to make their fortune in open source.

When it comes to staying power, the AI craze has a more plausible path to tangible financial benefit than the fanciful virtual reality craze. But still, it is clear that not all the companies working on AI will reach the promised land. Will Meta be one of the winners? Maybe, or maybe they'll bail and chase a new rabbit that hasn't even been invented yet – talk about sci-fi!

Or, in the words of rock diva Grace Slick [1]:

… if you go chasing rabbitsAnd you know you're going to fall Tell 'em a hookah-smoking caterpillarHas given you the call

Joe Casad, Editor in Chief