Peter Thiel on the Failures and “Self-Hatred" of Big-Tech

Hello. Well, George, thank you so much for that terrific introduction. Thank you for the plug for my Zero to One book. Certainly any additional royalty checks are very much appreciated. And so thank you for that plug. In my brief comments here, I'm going to offer three contrarian ideas for the future, where things are going with technology and computers. And I thought I would try to double these three ideas up as a sort of book review of Gilder's terrific book, Life After Google. And so I'm going to give you three contrarian ideas, but I'm going to weave in a little bit of a book review of Life After Google as well. One of the things that's always difficult about talking about the future is that we don't really know what's going to happen for sure.

It's not that deterministic. I think it's even hard to talk, to know what happened in the past. So let's start by talking about the history of the computer age and the history of the future, the way people talked about the future in the past and the way they thought, where was the computer age going to go? And if we'd been assembled in 1969, the future of computers was going to be massive centralizations. It was giant databases, giant AI-like computer intelligences that would run everything. It was like IBM. It was HAL, transposed in the Space Odyssey movie, one letter off from IBM. It was one of the early Star Trek episodes. They come to the planet Beta, which thousands of years earlier had been—somebody had unified the planet and left a computer program that ran the whole planet, and all the people were sort of

peaceful but very docile, nothing ever happened. And as usual, they sort of follow the Prime Directive and convince the computer to self-destruct. They don't follow the Prime Directive and then sort of leave everything in disarray. But the future of the computer age circa 1969 was centralization, a few large companies, a few large governments, a few large computers that controlled everything. Fast forward to 1999, the future of the computer age was going to be massive decentralization. It was sort of libertarian-anarchist. It was sort of the corollary to the end of the Soviet Union was that information had this decentralizing tendency and that, you know, the Internet was going to fragment things and it was going to be this sort of anarchic, libertarian place.

And if the—and then if we fast forward to 2019, the consensus view of the future today, I would submit, is that the pendulum has somehow swung back all the way to 1969. And the consensus view is, again, that it is about large centralization, Google-like governments that sort of control all the world's information in this super-centralized kind of way. And, and I think the Life After Google thesis that, that I agree with and endorse is that if we look at this past and people got it terribly wrong in '69 and things were going to go to decentralization '99, it actually started going back the other way. From the point of view of 2019, even if I'm hesitant to talk about the absolute future and where this all ends, ultimately, perhaps the contrarian thing is to say that maybe the pendulum can swing back and that things can swing back towards more decentralization, more privacy.

And things like that. And this is sort of what seems to be at least contrarian and at least something that we should always take more seriously. If you want to frame it in terms of the buzzwords of the day, in terms of crypto and AI, it is easily understood by people. It's always understood that crypto is somehow vaguely libertarian. But we never are willing to say the opposite, which is that AI, if crypto is libertarian, then AI is communist. And because it's centralized, it's—the computer knows more about you than you know about yourself. It is totalitarian. Communist China loves AI and dislikes crypto. And that we should at least consider the possibility that Silicon Valley is probably way too enamored of AI, not just for technological reasons, but also because it expresses this sort of left-wing centralized zeitgeist.

And so I think the first sort of contrarian idea I have is that perhaps it's time for the pendulum to swing back, and Life After Google at its core means that we are going to go back from this very centralized world today towards a more decentralized one. That seems to me to be the correct thing to bet on. Now, the second contrarian idea that is, of course, we can talk about how fast these things are happening and how much is happening in technology generally. And, you know, it's one of these things where we live in a world of incredible scientific and technical precision. We can measure Avogadro's number or the fine-structure constant in physics or other things like this to many, many significant figures.

But when we talk about the nature of the progress of science and technology today, and how fast science or technology are progressing, we do this in the most qualitative way with, you know, with incredibly little precision. And, you know, are we accelerating in scientific and technical fields? Are we progressing, but at a slower pace? How fast is this? And with respect to that question, we tend to only get these sort of, fairly vague answers. And I would say—but I would submit—that the sort of consensus in sort of both a Silicon Valley and a sort of academic context is that we are doing great and everything is just moving super fast. It's sort of all these forms of accelerationism, and we can debate whether it's utopian à la Kurzweil, The Singularity Is Near, all you need to do is sit back and eat some popcorn and watch the movie of the future unfold.

Or perhaps it is dystopian, à la all the science fiction movies from Hollywood, and the robots are going to kill you, or you're going to be in this Matrix, and we're sort of accelerating to utopia or accelerating to dystopia. And the somewhat contrarian thesis I have on this is always that perhaps the progress is not as fast as advertised, and that we've been in this world where things have been slower, and they've been slower for quite some time. One cut on this is always to differentiate the world of atoms and bits, and that since the 1970s, we've had a narrow cone of progress around atoms—sorry, around bits—computers, internet, mobile internet, software. These have been advancing fairly quickly.

The world of atoms somewhat more slowly. When I was an undergraduate at Stanford in the late '80s, I would say that almost every engineering field in retrospect was a bad field to go into. It was already obvious that you shouldn't go into nuclear engineering. Aero/Astro engineering weren't that good. But even all these other fields were not going to do that well in the decades ahead because electrical engineering was still okay. Computer science was the really good field to go into in the late '80s. All the other engineering fields, it was just regulated to death. There wasn't that much you could do in the world of atoms. And it turned out that we had a lot of slowed progress. And I think that if we sort of analyze this question of the rate of scientific progress politically and think of it as—

As sort of university professors or entrepreneurs or venture capitalists exaggerating about how much good they're doing and how great they are, we understand that the incentives are always to exaggerate and to say that we're just around the corner from curing cancer, we're around the corner in all these different things, and yet it's been in some significant way slower over the last 40 or 50 years. Certainly, one of the concerns I would have is that perhaps the danger is that, if anything, that things are slowing down even more at this point and that the sort of world of very fast progress in bits is actually starting to slow down. And if we look at... at the rate of progress in Silicon Valley.

It was sort of charismatic in this, because it was the one place where things were still happening relative to the rest of the US. And it's become a lot less charismatic in the last five years. You sort of think about the vibe in 24, even as recently as 2014, it was sort of, this was the place where the future was being built. In 2019, the big tech companies are probably as self-hating in some ways as the big banks were in 2009. And there's sort of a sense that it's not quite working. And so if you sort of, again, to pick on Google a little bit here, the Google propaganda of the future was, of course, it was all going to be bits and pieces. It was all going to be sort of more automation. You know, the story in 2014 were things like Google Glasses, so you could identify anybody you looked at at any time.

It was the self-driving car. I would say these aren't, like, that big a set of innovations. Probably a self-driving car is a step from a car, but not as big as a car was from a horse. So you can sort of debate quite how big these things are and how to quantify them again. But that was still the narrative that was very intact in 2014. And when you fast forward to 2019, it's striking how there's absolutely no narrative of the future left. Google doesn't even talk about the self-driving car very much. There's a sense that it may still happen, but it's further in the future. The expected time seems to be getting further away every passing year. It's—the expected time is getting even further into the future.

And so there's sort of the sense that perhaps there's this danger that we have slowed progress even in tech, even in the world of information technology. One of the—parenthetically, one of the ways this stagnation thesis sort of was embedded in the language—is the word "technology", of course, had a very different meaning. In the 1960s, technology meant not just computers, but also rockets and supersonic aviation and underwater cities and the Green Revolution in agriculture and biotechnology and new medicines and all these things, because all these things were progressing on many fronts. And today, if you use the word "technology", it is often synonymous with, with information technology, and probably just the software, Internet part of that, because that's the only part that has been moving, that has been progressing in recent decades.

And the danger is that even that has slowed down a lot, that somehow Silicon Valley's consolidated into some larger companies. It's gotten harder for new companies to break through, and it's gotten harder because new companies are, small companies are good at doing new things, and if people are doing fewer new things, then the big companies are more dominant. So I think the second cut on the Life After Google book in these terms is always what I think is the sort of, you know, Gilder's always super optimistic, but there is like a small undercurrent of pessimism to the book. And the undercurrent is, you know, the specter that haunts Life After Google is that maybe this current regime is going to go on for a really long time.

And, you know, we're, you know, there was life after television, but, but life after Google may take, you know, it will happen eventually, but it may take a little bit longer and that we're, that there is a danger that we're in this somewhat slowed, somewhat stagnant world. So, so that's sort of a second idea that we, I think we need to always grapple with a lot, that maybe we're in this, in this world of tech stagnation. Third contrarian idea I will give you is sort of a qualification on my first two ideas. Because I think, you know, the first one was it's about pendulums going to swing back to decentralization. Second one is, yes, it's swinging back, but it's just going to be slow because everything is slowed and we're in this world of stagnation.

But a qualifier to both the back-to-decentralization and the stagnation idea is that, at the end of the day, technology is about people. It's not about inanimate forces. It's not some kind of Marxist historicism about the way things are inevitably going to happen. And so the stress is always on, um, on individuals, small teams that start companies, that start new projects, that, that do new things, and, um, and, um, it's a question of human agency. It's not deterministic. We have every possibility to do these things, but at the end of the day, it is up to us to make it happen, and it's, uh, it's not set in stone that it's going to happen one way or another. And so, uh, in conclusion, I think sort of one other gloss on Life After Google is that perhaps you should think of the title as this 'life' being italicized or stressed or put in bold.

And that the critical thing is there is life. Life goes on. And in particular, human life. Humanity goes on. And that even though the dominant narrative is that tech is about inanimate forces or Marxist historicism, it really is at its core about human beings. And we should always, if we have to bet on it, we should always bet on the indomitability of the human spirit. Maybe leave it at that and open it to some questions and more of a conversation. Thank you.

Well, I'll ask the first question, Peter. Today, the US government has a kind of full-court press against all these giant technology companies. They're claimed to be monopolies. Peter, you're the world's leading expert on monopolies—how they form, what they contribute, what their life cycle is. What do you think of this, all these huge fines for relatively trivial offenses and the array of litigation against Facebook and Google and all these giant companies, these colossi that rule our world?

Well, I have to be—I always think you have to—one has to disclose one's biases when one speaks. And one of my biases and one of the things that makes me somewhat careful in answering your question is I'm on the board of Facebook, and so I have to be pretty careful how I answer your question here. But let me, let me ask, let me sort of give a somewhat indirect answer. You know, there's, you know, there are obviously the big tech companies are facing antitrust. There's a lot of regulatory stuff. Europe is pushing a lot of tax-related things. There are their privacy, data ownership issues. So there's sort of, you know, and then, of course, there's sort of a lot of different levels on which they are under sort of cultural and political attack.

And the way I understand what is—we sort of debate the merits, what parts of these criticisms are justified, what parts are not justified. I think the way I think of the context of why this is happening is it's always a story where it's like Silicon Valley did all these bad things. And I don't think that's the main story. I think the main problem Silicon Valley has is that it's not done enough good things. And the story that, again, picking on Google, that Google should be able to tell is, yeah, maybe there are all these things we're doing that are problematic in certain ways, but we've made the world a better place in all these other very important, very tangible ways. And that story has gotten harder and harder to tell.

And I think that remains sort of the, you know, the core challenge of Silicon Valley. You know, on the specific, you know, merits of these questions, the way I believe Silicon Valley should defend itself. And again, I think, you know, there's a lot, some of these criticisms are justified and Silicon Valley needs to do a better job in many ways. But I believe that the core defense Silicon Valley should give against the accusations of being too big and too centralized in all these problematic ways is that the alternative to Silicon Valley, the practical alternative at this point, is perhaps not the crypto-anarchist decentralization, but the most likely alternative is even more centralization in the form of Chinese Communist tech companies where it's basically just one giant Borg-like thing that's controlled by the Chinese Communist Party.

And so if there's a problem with Big Tech, if it's, you know, too homogenized, too centralized, and so on, we have to be careful that we don't set up an alternative where it's even bigger and even more centralized and literally communist.

We've got some questions here. "Thank you. I very much respect and appreciate your views on education, 95 Theses, Founders Fund, and beyond." I guess that's 1517 that we do together and I described in Life After Google. "How do you envisage the ideal improved education system to produce young people who will bring progress rather than more cogs for the existing machine?" There's a question for you.

Yeah, let me say something about the 95 Theses and the 1517 reference. We sort of had this idea that—and this was two years ago in 2017, but still very, very much correct—the way to think of the universities today is that they are as corrupt as the Roman Catholic Church was 500 years ago. And they are basically, you know, it is—you have sort of this system of indulgences that takes the form of, you know, runaway tuitions. You have this priestly or professorial class that is pretty lazy and doesn't do very much work. You have this theory of salvation where salvation consists of getting a diploma. And if you do not get a college diploma, you are going to end up in a very bad place. And so there's sort of a soteriological story as well.

And I think that it's sort of a universalized, centralized, big story. It's a successor to the universal Catholic Church—is this universal university system. And, you know, maybe this is an oxymoronic way to describe it, but I think you have to think of it as the Atheist Church with a capital A and a capital C. And that, you know, one of the things that I think, you know, I have—no problems with the church, and I have some problems with atheism, but I think the Atheist Church is really simply too much, and we should be fighting the Atheist Church in all of its forms. And I think the 1517 analogy, again, I can't quite predict the future, but is that reform does not come from within. There's sort of all these attempts you do to reform these universities from within, and it is just—

Feels like a fool's errand of sorts. You know, I remember in 2007, over a decade ago, I had this idea that my big nonprofit philanthropy project was going to be to start a new university. And I had someone at my foundation spend a year and a half looking at all the universities that had been started in the U.S. in the preceding hundred years, from 1907 to 2007. And it was a sorry tale of donor intent betrayed and money wasted and things just not working at all. And there were a few tiny things that you could say sort of worked. But on the whole, it was just a sorry, sorry tale of failure. And, you know, the lesson I took from it was one of, you know, a little bit of humility because, you know, one reaction is, well, people have failed us for 100 years and I'm going to do it better.

And the lesson I took instead was, you know, maybe the system is actually unbelievably hard to reform on the inside. And like in 1517, the Reformation starts from the outside. And the alternative is not to create some new universal reform, university system, some, some new template. It's for people to do different things. And, you know, the way, the way we started was with this, uh, Thiel Fellows Program. We tried to convince, you know, 20, uh, students a year to stop out of college and start companies. So it was not, uh, it was not a plan, but it was, um, going off the, uh, the sort of ever-narrower tracks that are working ever less well. And, uh, and some generalization of that is, is what I think, uh, we all sense that we need. And, um, you know, a lot of it, um...

The sort of, one framework that I had for our program that might be a good framework for the post-university thing is there's a lot of stuff that one can still do in computers. And so we always thought a lot was about programming. And then to the extent we wanted a program for what we were doing, we thought what we needed to do was deprogramming. And so the sort of, the label I thought, for the internal label we had for the Thiel Fellowship was it was about programming and deprogramming. And we need to deprogram people from the cult of the atheist church. Thank you.

What about online education? What is the promise of that? There are a lot of really significant initiatives which are actually having an impact. What do you think are the prospects really in using information technology to provide high-quality education?

Well, there's obviously a lot that one can do online and in all of these forms. When I take my venture capitalist hat and look at these things as things to invest in, um, I always, uh, think it's very important to sort of, um, um, break down a little bit the abstractions and, and, uh, to remember that education itself is always an abstraction. And if we, um, make it a little bit less abstract, um, let me suggest, uh, there are four different things that education means in practice in our, uh, in our society. Um, um, one, um, one thing is, um, is certainly, um, you know, the, the, the official meaning is that it's all about learning. It's about information. It's a positive-sum game. It's about learning, but, uh, sort of four, four, four sort of variations of it is it's an investment in your future.

So you go to college, it's sort of an investment into a better future. Um, second, it's a consumption decision. So it's like a four-year party. Um, and I used to think that it was sort of this bad superposition, this bad quantum superposition of investment and consumption. It was sort of like people in the housing bubble bought a large house with a swimming pool and it showed how frugal they were and how much they were saving for retirement. And it was sort of conflating investment and consumption, which is always a mistake. But I now think that it's the third and fourth one that are the more important. The third one is that it's an insurance product and that it's something you buy to avoid falling through the ever-bigger cracks in our society.

And they can charge more and more for it because people are getting more scared about some of the things that have gone wrong in this country. And the fourth one is it's a zero-sum tournament where you have to think of Harvard and Stanford and Caltech and the other elite universities as a sort of Studio 54 nightclub in which the value is not that you have this information and that it's actually the value comes from, from exclusion, from excluding people. And so there's like a Harvard or a Stanford version of putting Harvard or Stanford classes online and letting people take them. And these universities have done it, and people can take those classes in many cases, but they don't get credit at Harvard or Stanford, and taking those classes does not lead to a Harvard or Stanford degree.

And that tells you that a lot of the value of this very strange good that is called education comes not from the actual learning, but more from things like status, selection, exclusion, things of that sort. And I think that when we look at these different approaches, we have to try to disentangle what they're doing. So online education is great for learning, but unfortunately, learning has almost nothing to do with the so-called educational system.

Peter, Hayek said that the root and source of all monetary evil is the government monopoly of money. You started PayPal in part to overthrow this government monopoly of money. How's it going? What can we hope for in the future in the cryptocosm?

It's a little bit harder than I thought in 1999, certainly. One of the books that tremendously influenced me when I started PayPal was The Sovereign Individual. It was written by Rees-Mogg, the father of Jacob Rees-Mogg, the British Brexit parliamentarian. And it was about how we're gonna have cryptocurrencies, and it was gonna be this decentralized world where sovereignty itself would get decentralized to the individual level. And I read that book in the summer of '98, and it sort of inspired me to start PayPal as this sort of libertarian project that was going to liberate people's money from the control of the central monetary authorities. And there was sort of a whole set of ideas we had around that.

And, you know, it's, in the context of PayPal, we certainly built a successful business. But, but that part of the vision turned out to be quite hard to do. And there were certainly forms of electronic money that in theory were decentralizing, and in practice enabled more centralization and more control. And especially after 9/11 and the Patriot Act and COVID, all the ways that the regulatory state was able to more precisely track the flow of electronic money, that, you know, it may have actually trended quite the other way. Now, I think of, I do think of Bitcoin as, you know, the real thing. It is the sort of, it is sort of this, you know, it's sort of the decentralized currency that we fantasized about at PayPal, but, but didn't quite build.

Um, you know, I, I have, um, I have all these, uh, speculative thoughts on who Satoshi is and, you know, um, and the Bitcoin origin story. And without, uh, without stating precisely who, let me, uh, who I think it is. Let me, uh, let me, uh, give what I think is the key origin story for, uh, for Bitcoin. Um, we were at this—when I started PayPal, we were at this financial cryptography—I went to this financial cryptography conference in Anguilla in early 2000, sort of an annual conference. And they have sort of this gathering of people who are libertarian and into cryptocurrencies and probably a decent number of people working at the NSA and spying for the US government, other governments as well.

So, it's sort of this rather interesting gathering of people. And my theory is that Satoshi was at that conference, or at one like that in early 2000, and that these ideas were germinated in the late '90s already. And one of the manifestations of cryptocurrency at that particular conference was a system called e-gold. And it was anonymous, encrypted electronic gold certificates. And it was a company. It was based in southern Florida. They had these servers distributed all over the planet. But it was, in theory, this gold-based alternative to the dollar. It was going to be encrypted and safe. And all these problems with e-gold—we made it interoperable with PayPal. Turned out there was sort of a lot of criminal fraud, criminal activity.

Maybe that's always part of the territory of these things. We sort of disconnected it. But the people who started it eventually got in a lot of trouble. You know, the whole system was shut down. The company was targeted. They were prosecuted. I don't think they went to jail, but the whole thing was sort of disbanded. And there was something about the e-gold architecture that was, in theory, a cryptocurrency and, in theory, fairly decentralized with their servers in Iceland and Dubai and one or two other places. But in practice, it was still centrally attackable by the larger central government. And I believe the true Bitcoin origin story was in contrast to e-gold. It's almost the same name in a way.

It's like e-gold, Bitcoin. It has roughly the same—it's like you were thinking about e-gold: 'I'm going to do the next e-gold. I'm going to change e to bit and gold to coin.' And it was sort of a contrast to that. And so I think the reason we do not know who Satoshi is is integral to the history of Bitcoin. If we knew who it was, our too-powerful central government would probably do some very unpleasant things to that person.

Peter, why do you believe that the Communist Party of China could nurture or run giant companies with tremendous capabilities that actually are competitive with the best companies in the United States? How is it possible that a Communist Party can actually be a threat in this commercial, creative domain?

Well, I suppose, you know, I think these companies are a threat, and I think they are very tightly controlled by the Communist Party. So, the counterpoint to it is, you know, that seems to me to be the empirical reality. I think the theoretical—so, that's the empirical answer—the theoretical answer to your question is, is I don't think centralized, totalitarian communism is that good at creativity. I mean, you did have good number theorists and good chess players in the Soviet Union, so there probably are certain forms of creativity you're able to have even in a Stalinist or Maoist system. But I don't think the creativity is essential. And the competitive threat from these companies in China is that they are just extremely fast at copying.

They're very fast at copying things that work, and there's always—in any sort of creative business, there's a balance between the creative inspiration, what I call the Zero to One, the miraculous beginning—yeah—and then scaling the business and building it. And I think in every area of technology and innovation, the United States and the West more generally are still at the cutting edge. We're still ahead. We're the only place in the world where innovation is really happening. But how much value it is to us depends on how quickly it gets transferred and exfiltrated to China. And so, the West developed the atom bomb in 1945. And that was, again, it was a form of innovation that was possible in a free society.

But within four years, once you had proven that it could be done, it could be copied even in the Stalinist Soviet Union. So copying is much easier to do than originating. And if you have no IP protection, if we have this sort of massive exfiltration of information and ideas, then the disadvantage is not that great for China. And they can be quite a big threat.

This is a question from the audience. How does your understanding of technology inform you about the current pulse of personal relationships and the broader social and societal fabric looks like now and into the future? You can talk forever, Peter. Any room for the human spirit in our futures?

Well, one would hope so. Look, I think there are all sorts of unhealthy trends in our society and things that are very off. And certainly... certainly, I think the way I understand the Jordan Peterson phenomenon is that it's not that he's correct about Jungian psychology, which I think is just ridiculous. But Peterson's been effective because Jungian psychology is a politically correct way to talk about the extremely dysfunctional gender relationships in the United States and the West. And so, yeah, so I think I agree with that premise of the question that there are some really big problems. I would disagree with the claim that it's mainly driven by technology. I mean, maybe there are aspects of, um, of, um, of tech, of the sort of, sort of constant attention distraction or things like that, that are unhealthy and that are socially unhealthy.

But I, uh, I, I think the, uh, you know, I, I, I think it's actually driven by—it's over, these things are overdetermined. There are many things that drive it. And, um, and, you know, my, my intuition for, for, um, uh, you know, what's, what's gone wrong in, in, a lot of these cultural areas is just the sort of general sense of cultural malaise, of stagnation, of the future is not getting better, our society is not progressing. And so when people retreat into playing video games or living in their parents' basements or staying in graduate school, it's probably—maybe this is just like a—I think the solution is, yeah, maybe you should give them a Jordan Peterson-like psychology lesson. Maybe you can tell them to turn off their iPhones or take away their iPhones.

But I think the real structural thing is we have to get back to the future. We have to get back to growth in our economy generally.

That's at least always my bias. That's a wonderful, challenging opening to the conference, Peter. Thank you.