We look forward to presenting Transform 2022 in person again on July 19 and virtually from July 20 to 28. Join us for insightful conversations and exciting networking opportunities. Register today!
The last 12 months have taught us that the Metaverse is seen by many as the next great frontier in technology. The furore caused by Facebook’s eye-catching renaming as Meta has shown that the greatest technological space race of the 21st century is being fought on the battlefields of Wall Street – but the exchange has also helped identify some of the forgotten players , which will be an integral part of the mechanics of this brave new world.
The race for the metaverse is a unique prospect for the 21st century, largely because there is little understanding of what such a revolutionary mixed-reality digital space will actually look like in practice — or how companies will attempt to derive from it to benefit from new technology.
So who will be able to benefit most from the Metaverse? To solve this mystery, it is important to understand what form the metaverse is likely to take and how technology must adapt to the sheer scale of what promises to be the greatest technological innovation of the century so far.
According to forecasters, the metaverse is expected to grow at an astounding rate over the decade, accumulating a market value of more than $1 trillion within a few years.
According to PwC data, the global Metaverse market is expected to reach more than $1.5 trillion by 2030. This sheer rate of growth highlights why companies like Facebook have been willing to undergo a name change to cater to this burgeoning market, while at the same time positioning themselves with the best possible chance of establishing themselves as early leaders.
As a result, the newly rebranded meta has shocked Wall Street investors with its name change — leading to a sharp sell-off in shares, exacerbated by a broader decline in tech stocks as inflation rates rise.
Today, Meta (NASDAQ:FB) stock is down around 35.5% from its stock price following the announcement of the name change. However, it’s likely that CEO Mark Zuckerberg has discounted the prospect of a short-term drop in company stock and has taken short-term losses with the broader Metaverse growth over time.
The most memorable technological phenomenon that created such a din that spread to global stock markets and beyond was the dot-com boom at the turn of the millennium; However, the race for the metaverse appears to be fundamentally different, as it has resulted in battles between some of the biggest names on Wall Street as companies seek to capitalize on the market’s vast potential.
Here we can see how companies like Meta and Microsoft are employing very different strategies to gain significant prominence early on, before the push for widespread adoption of the technology takes hold.
According to Maxim Manturov, head of investment advisory at Freedom Finance Europe, Facebook’s renaming to Meta may have marked firing of the starting gun in a race that will engulf large-cap stocks on both the NYSE and NASDAQ.
“It’s likely that ‘the tide raises all boats’ and Facebook’s actions have enabled many companies to discover new products or distribution channels. Much of the heavy hype surrounding other companies was due to their size, as FB is a tech giant, while for smaller companies like Roblox or Unity, the Metaverse creates faster growth opportunities, which was temporarily reflected in the price. That’s why there was such interest from Investors,” Manturov explained.
Meta’s renaming in November 2021 paved the way for the emergence of other stocks inextricably linked to the Metaverse. Though many of these tech stocks have been hit hard by the recent inflation-driven tech stock sell-off, many companies intrinsically tied to the workings of the metaverse have their movements scrutinized on Wall Street — and offer investors and analysts alike some of the most reliable leads on how the Metaverse will actually work.
With that in mind, let’s take a deeper look at what Wall Street is telling us about the architecture of the metaverse:
The architecture of a new frontier
Despite Meta’s very public actions in recent months, very little attention has been paid to the mechanics of the Metaverse and how such a significant technological development is to be made possible.
According to Raja Koduri, vice president of Intel’s Accelerated Computing Systems and Graphics Group, running the metaverse will require 1,000 times more computing power than we have today.
Koduri added that placing just two people in a realistic virtual space would require significant computing power to render lifelike avatars, outfitted with detailed and diverse clothing, hair and skin. Generating language skills and precise movements requires sensors that can track audio and physical data inputs, as well as the ability to interpret real-world objects for interaction. Bringing such avatars to life would require pairing extremely high bandwidth with low latency, and this would need to be replicated hundreds of millions of times to accommodate users at the scale that many experts in the space are predicting.
Against this background, it is worth considering how and, above all, who can provide such computing power?
To that end, Nvidia seems poised to leverage its expertise in GPU solutions to transform tomorrow’s metaverse into an accessible frontier.
Nvidia’s Omniverse is a digital space that is currently very likely to be used, at least in part, to build tomorrow’s full-fledged Metaverse. Currently, over 50,000 unique developers have downloaded Omniverse since the beta launched in December 2020. The number of developers participating in Omniverse has recently expanded due to integrations with other major platforms such as Blender and Adobe – allowing millions of additional users to work within the framework.
Significantly, NVIDIA (NASDAQ:NVIDA) stock is an example of a company that’s remained relatively strong and stable despite mass sell-offs. In fact, the company’s value has grown by more than 100% in just one year.
This finding shows that investors are confident that NVIDIA’s GPU legacy will be able to deliver the performance needed to create a functional digital space for tomorrow, despite the fact that it requires a tremendous level of sophistication in computer graphics to make that happen to deliver tomorrow’s metaverse.
Companies challenging to become Metaverse leaders must adapt to the central role that big data and artificial intelligence will invariably play in the new technological landscape.
The metaverse will bring with it a host of new challenges, and the recent rise of AI solutions is likely to play a pivotal role in the continued advancement of data modalities such as voice, speech, and vision – which are native modalities to the World Wide Web.
As Joelle Pineau, co-CEO of Facebook AI Research, acknowledges, big data and AI must work extremely hard to create a mass-distributed, seamless experience for the vast amounts of Metaverse users online at any given time.
The sheer volume of data we’ll be feeding into the Metaverse will require an unprecedented level of machine learning capabilities to interpret our gestures, voices and browsing habits and respond in real-time.
Pineau acknowledges that while the demands of the metaverse will open up new possibilities for AI, they will also require “some big advances in our AI models.”
For the metaverse to be as widespread as the companies closest to it suggest it is important that data and AI models are unified across different endeavors to achieve their goals. Establishing a “world model” can be critical to providing a metaverse that truly works on a global scale.
The Metaverse Space Race is run by many different companies operating on different fronts. Alongside the very public moves of industry leaders, we also see companies like Microsoft using a series of strategic acquisitions to establish an industry-wide monopoly in gaming.
“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of Metaverse platforms,” Microsoft chairman and CEO Satya Nadell said in a post-$68.7 billion statement -dollar acquisition of video game giant Activision by Blizzard in early 2022.
Microsoft’s purchase of Activision Blizzard is one of the latest in a spate of video game and digital media company buyouts by the tech giants.
The strategy has been widely recognized as Microsoft’s strategic offer to become the Metaverse market leader by developing compatible video games – which the company believes will form the first frontier of the new technological ecosystem.
Microsoft’s approach could mimic the launch of the free Internet Explorer browser in the mid-1990s to attract large numbers of customers to its Windows software when the World Wide Web was still in its infancy.
Again, Microsoft’s acquisition-based approach has helped Wall Street outperform Meta, Roblox, and other companies looking to establish themselves as leaders in this space.
There’s still a long way to go before we all use the metaverse to hang out with friends and shop for groceries in virtual reality. But as companies very publicly struggle to adapt to the fledgling digital space, we can see big tech stocks pit themselves against each other on Wall Street in real-time. With this in mind, the markets should provide the strongest indicator yet of where the space race is being won and lost in the metaverse.
Dmytro Spilka is the chief magician at Solvid.
data decision maker
Welcome to the VentureBeat community!
DataDecisionMakers is the place where experts, including technical staff, working with data can share data-related insights and innovations.
If you want to read about innovative ideas and up-to-date information, best practices and the future of data and data technology, visit us at DataDecisionMakers.
You might even consider contributing an article of your own!
Read more from DataDecisionMakers