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Longtime Cisco CEO sees three forces shifting in opposition to tech

The three-headed monster of inflation, COVID and antitrust will dominate the eye of tech executives this yr, however the business stays a primary funding alternative due to rising expertise, Silicon Valley legend John Chambers predicts.

“General, tech remains to be a fantastic alternative” to take a position, Chambers, the billionaire enterprise capitalist who was chief govt of Cisco Techniques Inc.
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for 20 years, instructed MarketWatch in a wide-ranging cellphone interview Wednesday. However he doesn’t anticipate the land rush of preliminary public choices that swamped public markets in 2021.

“Final yr, numerous firms went public by way of IPO and SPAC that shouldn’t have,” Chambers stated. “Two-thirds of IPOs closed the yr beneath their IPO worth. They went out too early. This yr, the market shall be extra selective about SPACs and IPOs.”

For extra: The record-breaking IPO market in 2021 masked some problems under the hood

Greater than something, 2022 shall be outlined by inflation, which can “displace COVID as the highest financial difficulty for U.S. firms throughout industries,” stated Chambers, with long-term impression on salaries, the supply-chain, housing costs and a labor scarcity.

Including to the anxiousness and uncertainty is the withering affect of COVID, which can proceed to propagate the Nice Resignation as people chase their entrepreneurial goals in addition to the reimagining of tech workspaces and commerce exhibits. COVID will pressure giant conventions like CES and others to evolve into “blended variations” of in-person and digital conferences, in keeping with Chambers.

The wild card for 2022 stays antitrust and regulation.

“It’s coming,” Chambers stated, partly, as a result of Massive Tech has strayed from “tech for good.”

“Three to 4 years in the past, the Democrats and the Republicans got here out to speak to Silicon Valley leaders and stated regulation was coming, and Silicon Valley didn’t hear,” he stated. “Firms have been divided. They aren’t used to working collectively, and sometimes don’t like one another.”

Antitrust in 2022: ‘A year of thousands of tiny tech papercuts’

Whereas executives from Microsoft Corp.
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and Apple Inc.
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have typically dealt with relations with Capitol Hill “fairly nicely,” firms with social media components comparable to Google and Fb haven’t communicated as nicely, touchdown them in hotter water, Chambers stated.

“They didn’t construct belief and communications, and are Heisman [Trophy] stiff-arming lawmakers” he added.

Underscoring the animus, Sen. Marsha Blackburn (R., Tenn.) recounted the “callous, unconcerned, and ignorance” attitudes of Fb executives who testified on baby security on-line throughout two current Senate hearings.

“The sport is up for them,” Blackburn instructed MarketWatch final week. “I’m assured you will note [antitrust] laws grow to be regulation this yr.”

Chambers does anticipate fertile floor for startups specializing in synthetic intelligence, cybersecurity and cloud shifting to the sting. “These areas are the place we are able to anticipate the subsequent Google
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GOOG,
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,
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and Tesla
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,
” he stated, pointing to the upside of CrowdStrike Holdings Inc.
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because the cybersecurity business heads towards consolidation in his view.

“I’m bullish about AI lastly going mainstream after years of hype — larger than the cloud or the Web — and being the largest driving pressure for digital transformation over the subsequent decade,” Chambers stated.

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