Australia prepares for a social media ban – and is AI a bubble about to pop?
Hello, and welcome to TechScape. I’m your host, Blake Montgomery, writing to you from a New York City that feels much colder than last December. 🥶In a world first, Australia implemented a ban on social media use for people under 16. It’s the first country to take such a far-reaching measure. Starting on 10 December, children and teens under 16 will not be allowed to use social media in Australia. Tech platforms – a wide category that includes Instagram, YouTube, Snapchat and TikTok but not direct messaging services like WhatsApp or Facebook’s Messenger – will very soon be obligated to deactivate the accounts of too-young users.What does the ban entail?Platforms that the Australian government has included in the ban will need to deactivate all accounts for users under 16 and prevent those users from holding an account until after they turn 16. To make that possible, all Australian social media users will need to prove their ages. The country’s online safety regulator, the eSafety commissioner, must be satisfied the platforms have taken “reasonable steps” to prevent under-16s from holding an account, or they will face a fine of up to $49.5m.Read more: Australia social media ban: when does it start, how will it work and what apps are being banned for under-16s?What do tech companies say?They are opposed to the prohibition.What do teenagers have to say?Some teens who spoke to my Guardian Australia colleagues said they were moderately in favor or indifferent to the ban. Emma Williamson, 15, said: “I think everyone will miss the socialising part. But it’s also a relief to not have to do that on a platform designed to lure you in and waste your time, no one is going to miss scrolling.”Others expressed complicated feelings of government overreach into their personal lives. Ezra Sholl asked a dissenting question: “I’m 15 years old and have a disability. Social media has been a lifeline – why is the government kicking me off?”Read more: ‘Everyone will miss the socialising – but it’s also a relief’: five young teens on Australia’s social media banAre other countries following Australia’s lead, as tech companies feared?Yes. Malaysia plans to follow in Australia’s footsteps in 2026, according to the country’s communications minister. Denmark and Norway are pursuing similar measures. The European parliament voted in favor of a ban on children under 15 in November. France’s Emmanuel Macron said his administration will implement a ban in the absence of one passed at the EU level.What about AI?Social media is not so new any more. AI chatbots represent the next frontier in the relationships between teens and computers. These responsive bots have even been recorded teaching teens how to circumvent Australia’s rules about social media. The country’s eSafety commissioner has expressed a desire to restrict the availability of those products to teenagers with stringent new laws as well.Is AI a bubble?View image in fullscreenIs AI a bubble about to pop? Photograph: Artur Widak/NurPhoto/Rex/ShutterstockIs the waterfall of money pouring into the artificial intelligence industry going to plunge the world into a recession? On Monday’s episode of the Guardian’s Today in Focus podcast, I go over the various perspectives on how the enormous investment in the sector has already taken over the US economy and is poised to do so to the globe’s, which some analysts say risks worldwide financial crisis. Will AI end in a crash a la Amsterdam’s tulips? Host Nosheen Iqbal asks about AI’s circular financing deals, massive valuations, comparisons to past bubbles, and whether “the spending is real”, as one analyst said after last quarter’s strong Nvidia earnings.We have all been witness to the huge rise of AI in the last three years since OpenAI launched ChatGPT. In that time, AI has become so enormously important to the US economy that seven companies – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla – make up a third of the S&P 500, the index of the 500 biggest stocks in the United States stock market. It’s a huge concentration of money in one singular industry. All of those companies are very involved in the AI boom. For seven of them to comprise a third of that entire index’s value makes for a very top-heavy financial landscape. If any one of them falters in a significant way, it will send shock waves through the entire US economy.Does that make AI a bubble that’s about to pop? I don’t think so. I think the money is real, to repeat the Nvidia analyst. There may be market corrections some time soon, and bubble doomsayers will say: “This bubble has popped.” AI bubble yeasayers will say: “No, the financial pain is minor in comparison to AI’s major gains.”It’s not impossible that AI precipitates a financial crash. So far, though, the steam behind the industry is so strong and growing so fast that, as a journalist, we have to view things as they are now. The biggest companies in the world are very profitable and making gargantuan investments. That is the story as it stands today. Will they lose all their money in the financially disastrous blink of an eye? I don’t think it will be so fast. But MySpace had 800 million users at its peak, just as many as ChatGPT does now, and that disappeared with extreme rapidity after Rupert Murdoch bought it. So I don’t think AI is a bubble – yet.Listen to the whole podcast at this link, on Spotify or Apple, or wherever you get your podcasts.The wider TechScape
