Technology industry outlook

ChatGPT’s arrival in November 2022 created a surge in public fascination with artificial intelligence and its tremendous potential to disrupt industries and open doors for creativity in fascinating new ways. It didn’t take long for investors and Big Tech to notice, with large AI capital expenditures and significant investments quickly following. Companies like Nvidia became household names, as the computing pioneer reached the top spot for largest U.S. publicly traded company by market capitalization.

But after three years of an unprecedented surge in AI funding, the industry is still figuring out how to monetize the technology while continuing to make sizable investments. While Big Tech firms have pledged to continue massive capital expenditures on AI infrastructure, DeepSeek’s ability to produce high-quality AI while minimizing capital investment has highlighted how dynamic the market is and how rapidly change is arriving.

Quantum computing, which uses qubits and parallel processing, offers substantial speed improvements over traditional computing. However, it requires extremely low temperatures to operate, posing commercialization challenges. Despite sporadic private funding, public investments in quantum technology are substantial, with the U.S. contributing significantly. The convergence of AI and quantum computing promises vast benefits, including advancements in drug therapies and climate solutions, but also presents business risks and requires careful consideration of social and environmental impacts.

Tech IPOs have slowed in North America over the past couple of years. As technology companies progress through their lifecycle—startup, growth, maturity and exit/IPO—investors typically follow along. However, if an expected step on this trajectory does not materialize, investors do not reap their returns.

In the face of a funding environment characterized by scarce venture capital, reduced business valuations and fewer exit options, technology companies must embrace innovative strategies to secure investment, drive growth and strengthen their competitive advantage. Technology companies have two main ways to exit, through IPO or acquisition.