MWC 2024 Day 1 – Back in business

Geopolitics is everywhere.

• After a very slow 2021, 2022 and some recovery in 2023, Mobile World Congress in 2024 is finally back in business.
• The halls are as busy as they have ever been and the queues for loos and to buy a sandwich are fully back to historic norms.
• There is also more on display in terms of vendors, box makers, software providers and especially start-ups which can be found on the periphery of most halls and everywhere in halls 8.1 and 8.0.
• However, what is most striking is the geopolitical polarisation that is taking place across the world which is increasingly being expressed in the technology industry.
• In stark contrast to CES, China is back and back in force.
• Its operators are all here, its device vendors dominate the always-entertaining annual Android badge hunt and its payment providers, consumer device makers, AI and software vendors can be found in most halls.
• Furthermore, delegations have come from China and large groups of executives from Chinese companies can be seen touring and meeting with senior executives from all of the usual names.
• Also present more heavily than ever is the Middle East and the Gulf nations in particular.
• STC is the main lanyard sponsor and there is a large Neom stand although it is not entirely clear what it is doing at MWC.
• Both STC and E& from the UAE have upgraded the size of their stands and moved into more prominent positions in the larger halls.
• The Middle East is doing a good job of navigating a path that maintains its neutrality in the ideological struggle between the West and China which has greatly increased its global relevance.
• This is evidenced by the World Government Summit in Dubai which usually passes with barely a mention, but this year it made headlines across the world with the attendance of CEOs from a large number of giant global corporations and technology companies.
• I think that the show has clearly benefitted from the polarisation of the technology industry and MWC has taken over as a meeting place for China and its business partners from the USA and Europe.
• While this is good for MWC it is bad for the technology industry overall as the technology ecosystem is continuing to fracture along geopolitical lines.
• Neither RFM nor Alavan Independent think that the USA’s hardening stance on China is going to change as a result of the November election as this is one issue that both sides of the aisle and the electorate seem to agree on.
• Consequently, we see the continuing balkanisation of the technology industry meaning lower long-term growth for all concerned.
• MWC’s gain is the global industry’s loss without a significant rapprochement.

AI is also everywhere.

• AI easily wins the most overused term at the show this year, far more so than at CES, where there was more interest in transparent displays than AI.
• However, at MWC, it is everywhere which is not a huge surprise given Nvidia’s recent run of earnings and Arm’s recent ascension to the AI pantheon.
• Everyone else wants in and there is no sign of the party coming to an end although people are beginning to ask the right questions at the periphery.
• These questions revolve around how to make money from a generative AI service and how to deploy it if one wants to run it on something other than silicon in the cloud made by Nvidia.
• This is an increasingly pressing question as there are now 520,000 models available on Hugging Face and the LlaMa and Mistral-powered open-source community is churning more with every day that passes.
• This makes the proposition of paying more for Copilot than a small business (like RFM) spends on all of Microsoft Office 365 difficult to sustain.
• This combined with an ever-increasing number of chatbots all trying to extract $20 per month for a generative AI service leads me to think that there is going to be substantial price erosion.
• This is what may burst the AI bubble and bad as it may seem at the time, it will be nothing like as bad as what has happened to autonomous driving because generative AI has a product with some excellent use cases while autonomous driving still has no product.
• There is no sign of this yet and 2024 is likely to be characterised by the first implementations of trained models and the beginning of the battle for the AI ecosystem.
• AI winter is coming, but, at the moment, the forecast is for non-stop sunshine at least for a while yet.