Peter Thiel on Big Tech ‘Monopolies,’ Antitrust, and the Real Threat to Innovation

Well, I have to disclose my biases when I speak. One of my biases is that I'm on the board of Facebook, so I have to be careful how I answer. Let me give a somewhat indirect answer. The big tech companies are facing antitrust, regulatory stuff, Europe pushing tax-related things, privacy and data ownership issues. They're under cultural and political attack on many levels. The way I understand the context is that Silicon Valley's main problem is not that it did all these bad things, but that it hasn't done enough good things. The story Google should be able to tell is that they've made the world better in tangible ways, but that story has gotten harder to tell. The core challenge remains. On the specific merits, I believe Silicon Valley should defend itself by noting that the alternative to being too big and centralized is not crypto-anarchist decentralization, but even more centralization in the form of Chinese communist tech companies, which are like one giant Borg-like thing controlled by the Chinese Communist Party. So we have to be careful not to set up an alternative that is even bigger, more centralized, and literally communist.

It's a little bit harder than I thought in 1999. One of the books that influenced me when I started PayPal was 'The Sovereign Individual' by Rees-Mogg, about how cryptocurrencies would decentralize sovereignty to the individual level. I read that book in the summer of '98, and it inspired me to start PayPal as a libertarian project to liberate people's money from central monetary authorities. We built a successful business, but that part of the vision turned out to be hard. Forms of electronic money that were theoretically decentralizing in practice enabled more centralization and control, especially after 9/11 and the Patriot Act. It may have trended the other way. I do think of Bitcoin as the real thing, the centralized currency we fantasized about at PayPal but didn't quite build. I have speculative thoughts on who Satoshi is. Without stating precisely who I think it is, let me give the key origin story. When I started PayPal, we attended a financial cryptography conference in Anguilla in early 2000. It was a gathering of libertarians, cryptocurrency enthusiasts, and probably some NSA people. My theory is that Satoshi was at that conference or one like it. One manifestation of cryptocurrency there was e-gold, anonymous encrypted electronic gold certificates. It was based in southern Florida with servers distributed globally, but in practice it was centrally attackable by the government. The people who started it eventually got in trouble, the system was shut down, and they were prosecuted. I believe the true Bitcoin origin story was in contrast to e-gold. The reason we don't know who Satoshi is integral to Bitcoin's history; if we knew, our powerful central government would probably do unpleasant things to that person.

These companies are a threat and they are very tightly controlled by the Communist Party. That's the empirical reality. The theoretical answer is that centralized totalitarian communism isn't that good at creativity. There were good number theorists and chess players in the Soviet Union, but creativity isn't essential. The competitive threat from Chinese companies is that they are extremely fast at copying things that work. In any creative business, there's a balance between creative inspiration, the zero to one, and scaling. In every area of technology and innovation, the US and the West are still at the cutting edge. We're the only place where innovation is really happening. But how much value it is to us depends on how quickly it gets transferred to China. The West developed the atom bomb in 1945, but within four years it was copied by the Stalinist Soviet Union. Copying is much easier than originating. If we have massive exfiltration of information and ideas, then the disadvantage is not that great for China, and they can be quite a big threat.