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Tech’s Progress Dilemma: Expansion and Risks Evolve Side by Side

Tech’s Progress Dilemma: Expansion and Risks Evolve Side by Side

Bitget-RWA2025/11/19 14:58
By:Bitget-RWA

- Cloudflare and Akamai show tech sector's growth in cloud/AI but face valuation concerns amid slowing markets. - Recent Cloudflare outage exposed centralized infrastructure risks, disproportionately affecting smaller platforms. - CEO Prince warns AI replacing junior staff could harm innovation, emphasizing human-AI collaboration's value. - Web3 projects grapple with balancing decentralized protocols against centralized CDN/DNS dependencies in user-facing layers. - Industry must reconcile rapid innovation

The technology industry continues to be a contradictory force, driving both advancement and exposing new weaknesses at the same time.

(NET) and (AKAM) are prime examples of this contrast, as they demonstrate expansion in cloud platforms and AI integration, yet face scrutiny over their valuations and operational stability. At the same time, Web3 projects are advocating for decentralized finance, but centralized points of failure—highlighted by a recent Cloudflare disruption— .

Cloudflare’s results for the third quarter highlight its ability to withstand a slowing technology market. The company’s revenue climbed 31% year-over-year to $562 million, and non-GAAP operating income reached $85.9 million, representing a 15.3% margin—

. Its AI inference service, introduced in 2023, has fueled greater demand for secure cloud offerings, mirroring broader sector movements. Still, some analysts warn that maintaining a 30% growth rate on a larger revenue base may not support its current valuation, with one analyst despite Cloudflare’s strong performance. Likewise, Akamai’s 5% revenue increase to $1.05 billion signals a pivot toward cybersecurity and cloud, but falls short of expectations, with shares valued at a price-to-sales ratio of 2.9— . Although profits remain solid, the company’s slow revenue growth underscores the difficulties in moving away from traditional content delivery models.

The convergence of artificial intelligence and workforce trends adds further complexity.

Tech’s Progress Dilemma: Expansion and Risks Evolve Side by Side image 0
Cloudflare CEO Matthew Prince recently highlighted the value of keeping junior employees, cautioning that substituting early-career staff with AI could trigger a “talent doom cycle.” He stressed that younger workers bring new ideas and are essential for reverse mentoring in AI adoption— . This viewpoint stands in contrast to the industry’s broader push for automation, as companies weigh productivity improvements against the potential loss of institutional expertise and creative capacity.

The latest Cloudflare service interruption brought to light weaknesses that go beyond technological optimism. A “latent bug” in the company’s bot mitigation system led to widespread outages, resulting in 500 errors on platforms such as X (Twitter), ChatGPT, and Coinbase—

. The event demonstrated the internet’s dependence on centralized infrastructure, with smaller services suffering more than major players like Google and Amazon. As one analyst observed, “a single vendor’s breakdown can trigger a widespread outage,” between decentralized blockchain ideals and real-world reliance on centralized systems.

The incident has revived discussions about redundancy in crypto infrastructure. While many projects focus on decentralized protocols, their user interfaces often rely on centralized CDNs and DNS services. This creates a “chokepoint” risk: even if a blockchain is distributed across thousands of nodes, a single CDN failure can cut off access to vital applications—

. For crypto developers, the challenge is to find a balance between cost-effectiveness and robustness—whether by using multiple CDNs, alternative DNS options, or hosting their own solutions.

As the sector deals with these issues, moving forward will require balancing innovation with systemic risk. Cloudflare’s 30% revenue growth and Web3’s experiments in governance showcase the industry’s promise, but the recent outage and valuation debates are reminders that advancement is not guaranteed. In an era where technology increasingly defines global connections, the boundary between progress and risk becomes ever more delicate.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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