• This week Goldman Sachs' largest ever tech conference is happening in San Francisco.

• Tech executives from Microsoft, Qualcomm and Western Digital among others shared dour outlooks.

• Chipmakers feel the early signs of weakened consumer demand, which could last well into the next two quarters.

At the end of the first day of the Goldman Sachs Communacopia + Technology Conference, I met one of my oldest and best sources at the bar of the Palace Hotel in San Francisco.

"It's been a shitty year," the veteran tech investor said, sipping an Old Fashioned.

The stock market is down, and tech stocks have been walloped, especially the long-duration, growth companies he likes to back. The IPO market is dormant and probably won't recover until well into 2023, while tech M&A will be difficult, the investor added. Early on Monday, news broke that Goldman is cutting hundreds of jobs, lending an extra soupcon of gloom.

And yet, the conference was heaving with attendees and one Goldman banker noted this was the busiest version of the event ever. While many tech executives shared dour outlooks, no one was freaking out and some were cautiously optimistic about 2023.

These companies, especially chipmakers and their customers, are one of the best economic indicators to watch. Chips are in everything now, so when demand wanes, these businesses are among the first to feel it.

This is the message they shared this week: Welcome to the weirdest economic slowdown in recent memory. Interest rates are rising and inflation is staying stubbornly high, so people are expecting more pain to come. But the tech industry churns onward, with some enduring pockets of strength.

"Everyone is waiting for the wheels to come off but they are still turning," this investor said, citing Tesla and Amazon as examples. This person asked not to be identified so they could speak freely.

A "rather abrupt deceleration of demand"

Chuck Whitten, co-COO of Dell, one of the largest PC and server makers, shared a similar confounding mix of caution and quiet confidence during a Monday afternoon conference presentation.