AUSTIN, Tex. — A tech-world sign of the times: In one calendar year DFD has now covered two conferences where a prominent speaker has canceled an appearance due to economic catastrophe.

The first was Do Kwon, the Terra/Luna mogul who canceled his talk abruptly at a Web3 conference last year. Now it’s Silicon Valley Bank executive Rochelle Stewart, who didn’t appear here at SXSW in Austin on Monday for a scheduled “mentor session” (the link now produces a 404 error) on entrepreneurship and business development. (SXSW didn’t respond in time for publication to a request for comment on the panel.)

Which is understandable, considering the bank’s sudden collapse over the weekend is the biggest U.S. financial disaster since the 2008 crisis.

The Silicon Valley Bank saga might seem at first like a pure finance story, an update of 2008 for the Uber-for-everything startup era. But that update is exactly why it’s something much bigger: It is a cold-water reminder that the sprawling ecosystem of startups working on blockchain, AI and virtual-reality tech (among other things) isn’t just driven by pure intellect and ambition. It needs lots of capital.

“Growth” in this sense is largely dependent on venture capital’s willingness to make large sums of investment capital available on relatively cheap terms.

Well… rates went up. A bank (two, actually) cracked. And now, it’s about as severe an epithet as you can conjure in certain tech circles to say someone is a “low-interest rate phenomenon.”

So it’s time for a reckoning, right? Well, not exactly. To stroll around Texas’ sunny capital as the festival kicked off over the past few days, you might not have known anything was wrong at all. After all, macroeconomics aside there’s still plenty to be excited about: The generative AI hype machine; breakthroughs in VR tech; the endless struggle for autonomous vehicle improvement.

And then there’s the inherently bubble-like nature of a massive conference like this one, with the whole week serving — intended to serve — as a sort of temporary retreat from reality. (Oh yeah, the music is pretty good too.)

“I’ve definitely brought it up with people, and it’s kind of been like, ‘oh yeah, that was crazy,’” said Jesse Damiani, an arts and culture advisor for Protocol Labs who presented on “Simulating the Future” this morning. “Then it kind of just ends there.”

In other words, the existential panic spread by certain high-profile VCs on Twitter has been largely absent in the single biggest annual in-person conversation about emerging technology.

So… what are they actually worried about? Many of the tech conversations at SXSW so far have been focused on how regulators, competitors, artists, and society writ large are dealing with the meteor strike that has been the rise of generative AI.

This morning Jerome Pesenti, Meta’s former vice president of AI, shared his view on how regulators might (or should) deal with the dizzying pace of its development.

“Ideally you would get super-baseline regulations, but this never happens fast enough,” Pesenti said. “Regulators always take five or 10 years too long to get to this, and then they try to regulate too much. What’s your MVP [minimum viable product] regulation? That would be really useful.”

On Sunday afternoon Dave Rogenmoser, CEO of generative AI startup Jasper, chatted happily with venture capitalist Sameer Dholakia about “Building A Company In The Erupting Generative AI Industry” — and about how he’s not even really sweating the sudden omnipresence of ChatGPT as a competitor to his own product.

“People want me to be having this big existential crisis, but I’ve just learned to roll with the punches,” Rogenmorser said.

The metaverse is still alive and well at SXSW this year, too, appropriately enough for a technology that overlaps so heavily with the cutting edge of popular culture on which SXSW was founded. (More on that tomorrow.) Damiani and Leah Zaidi, executive director of a future-minded consultancy (and advisor to the governments of Canada and Finland), presented their case for “simulating the future,” or running out-there experiments like creating synthetic foods within virtual reality in order to stimulate real-world progress.

“When you don’t use the word ‘metaverse’ and you show people actual use cases, that’s when they get really excited,” Zaidi said — and those “use cases” abound at SXSW this year, from a slew flashy presentations on (what else, in music-obsessed Austin) live performance in the metaverse to an immersive documentary on cultural preservation in Ukraine.

Still, although the general good vibes of techno-optimism still prevail here this week, Damiani acknowledged a creeping awareness in the startup world that the days of bottomless pockets and “Silicon Valley”-style opulence might be waning.

“The proverbial bill is due,” Damiani said. “You had this decade where essentially there was no ‘put up or shut up’… my sense is the Silicon Valley Bank moment will have a chilling effect — not as big as if the FDIC hadn’t stepped in to guarantee deposits, but as a kind of shot across the bow for the type of founders that would otherwise go blue-sky, big-vision with metaverse ideas.”

The European Union has a serious presence on the ground in Austin this year, with several days’ worth of programming exploring the bloc’s role in global tech innovation.

One panel Sunday titled, appropriately, “Where Did Tech Innovation Go?”, featured a group of researchers and entrepreneurs along with the Netherlands’ minister for digitalization, Alexandra van Huffelen. Van Huffelen and the panelists wrangled with how the EU might strike the right balance between maintaining its status as the world’s leading tech regulator and its goal of increased competitiveness with the U.S. and China.

The lone regulator on the panel, van Huffelen stated her conviction that no matter how much wiggle room is given, government inevitably needs to move first — citing the Netherlands’ massive child welfare scandal that resulted from the misuse of AI systems.

“AI is not harmless; it can be very harmful,” said van Huffelen. “You want to make sure that the regulation is already there. Yes, we’re checking what’s there [in the tech industry] and what remains working, but the idea of not regulating is not an option.”

All right, you want more Silicon Valley Bank today.

What the hell actually happened? In today’s Morning Money POLITICO’s Sam Sutton surveys the landscape as Washington does the same, trying to sift through the wreckage of the old-fashioned bank run that collapsed America’s 16th-largest bank.

The Treasury Department and other regulators stepped up last night to assure all depositors that they’d have access to their money at the opening of banking hours today, yes. But the focus is now largely on how the bank got there in the first place, and the psychological effect on depositors and the market of what House Financial Services Chair Patrick McHenry called “the first Twitter-fueled bank run.”

Rep. Stephen Lynch (D-Mass.) told MM that regulators “acted quickly, decisively and did the best job they could under the circumstances but there’s still that nervousness out there.”

That nervousness has also touched the already skittish world of crypto: Sam points to reporting from Bloomberg that the collapses of Silicon Valley Bank, Silvergate Capital Corp. and Signature Bank “have set off a fresh set of stresses” for the industry and put billions in crypto trading at risk.