His money talks — contentiously
Peter Thiel is Silicon Valley’s homegrown Cassandra. He warned for years that the big tech companies were arrogant and clueless and less good for mankind than they believed.
Comeuppance, the billionaire investor warned, was coming.
Trouble has arrived. Unfortunately for Thiel, the storm is centered on Facebook, whose board he has been a member of practically since its founding. The social network, which billed itself as bringing democracy and enlightenment to the world, was used by the Russians to subvert democracy and sow confusion in the United States.
Even people paid to see the future did not see that one coming.
“The board’s role is to help think about some of the mediumand longer-term problems coming around the corner,” Thiel said. “We were far from perfect in doing that.”
Thiel, 50, is at the center of nearly every issue that roils Silicon Valley, ranging from the tech elite’s fascination with New Zealand hideaways (Thiel obtained New Zealand citizenship) to bitcoin (he is a major investor) to the problems of herd thinking (he is moving from San Francisco to Los Angeles to escape it) to the evolving role of content on the Internet (he has been exploring the creation of a media company that would outflank Breitbart and Fox for a younger audience).
Two subjects are overwhelming everything else: President Trump, whom Thiel aggressively backed during his campaign, and Facebook, whose core mission is being called into question in the wake of the Russian revelations. In a typical Thiel move — he tends to run toward controversy even as his Silicon Valley peers try to make them-
selves inconspicuous — he agreed, in a rare interview, to talk about both.
“It’s been a crazier two years than I would have thought,” Thiel said in his new Midtown Manhattan apartment, which is so far up in the clouds that it literally looks down on Trump Tower.
Despite the proximity, the mutual enthusiasm between Thiel and Trump seems to have cooled. After Thiel spoke at the Republican National Convention in 2016, there were unsourced media reports that said Trump wanted to put him on the Supreme Court. But now even photo ops are rare.
The investor said he had last spoken to the president “a few months ago.”
“We don’t talk that often,” he said, but added, “I can get access anytime I want.”
The Trump whom Thiel touted at the Republican convention was a candidate who would “end the era of stupid wars and rebuild our country,” move us past “fake culture wars” and start projects the equivalent of the Apollo space program. That does not seem to be the president he got.
“There are all these ways that things have fallen short,” Thiel said. But he said he had no regrets about his endorsement. “It’s still better than Hillary Clinton or the Republican zombies,” he said, referring to the other candidates.
The White House did not respond to a request for comment.
Thiel is routinely labeled a libertarian. On a bookshelf in the apartment, as if in confirmation, is a hardback copy of Ayn Rand’s “Atlas Shrugged,” the bible of the movement. A gift, he said.
A lesser-known but possibly deeper influence was French philosopher René Girard, who taught at Stanford when Thiel was an undergraduate there. For 15 years, on and off, Thiel sat in on a study group about Girard’s ideas. Girard believed humans were deeply mimetic, which is to say they copy one another.
“It’s very anti-Ayn Rand: There are no selfcontained autonomous figures,” Thiel said. “Our desires are not our own. They get shaped powerfully by the society around us.”
It was this illumination that helped him see the potential of Facebook — where people could find out in intimate and addictive detail what their friends were up to — when it was barely a year old. He was the first outside investor, buying 10 percent of the company for $500,000.
He sold most of his holdings in 2012 as Facebook went public. A few months ago, with Facebook’s market capitalization at about $500 billion, he sold most of what he had left.
Last summer, there was a flap when a memo by a fellow board member, Netflix CEO Reed Hastings, appeared in the New York Times. In the memo, Hastings wrote to Thiel that he displayed “catastrophically bad judgment” in supporting Trump.
Facebook CEO Mark Zuckerberg did not ask him to step down from the board, and reports that he wants to leave the board are incorrect, Thiel said, noting that among other things he brings “ideological diversity.” He declined to say exactly how much or what kind of advice the Facebook board was offering Zuckerberg, but defended the company from criticism that it was slow to wake up to what the Russians did.
“Remember when Trump said the election was going to be rigged? People said that was crazy — ‘How dare you question the integrity of the electoral process?’ That was the view of most of the people working at Facebook, too,” he said. “They did not think things were so hackable. It was a mistake, but an understandable mistake.” Facebook declined to comment.
The anger being turned on Facebook, Thiel argued, is less about Russia specifically and more about tech arrogance — its failure to do so much for so many. It is a sentiment that helped put Trump in the White House.
“The Trump campaign slogan, ‘Make America Great Again,’ was perhaps the single most offensive thing you could say to Silicon Valley,” he said. “Silicon Valley says the future is going to be better than the past. That is the propaganda, if you will.”
A friend of his in Silicon Valley had the idea of running for governor of California this year. Thiel’s advice was that he had better have a good answer to this question: Why is tech good for the average person in California? The answer, he cautioned, couldn’t be a banality, such as “it’s making us more connected,” and it couldn’t be utopian, such as “it’s going to cure all diseases.” “He wasn’t able to come up with an answer, and I couldn’t come up with one, either,” Thiel said.
He declined to identify the friend, but it is well known in tech circles that Sam Altman, president of Y Combinator, the prominent startup accelerator, was thinking about running. Altman confirmed it was him and said he had decided not to run “for many reasons.”
There is a big painting of a cresting wave in Thiel’s living room, and it might as well be a visual metaphor for what is going on in big tech now.
“Having some ambition that transcends just making money is a critical thing for a company,” he said. “But there is some point where it gets crazy and self-delusional.”
He added that the companies “are probably in some trouble — maybe it’s a little, maybe it’s a lot.” The prospect of government regulation looms.
In 2015 and 2016, Thiel gave $300,000 to Josh Hawley, who was campaigning to become Missouri’s attorney general. Hawley won, and in November he opened an antitrust investigation of Google. A spokeswoman for Hawley, a Republican who is now challenging the state’s Democratic senator, Claire McCaskill, said there was “no connection” between Thiel’s donation and the investigation. Google declined to comment.
The news last month that Thiel is moving from San Francisco to Los Angeles reflects a shift that is as much mental as literal. Getting out of the tech bubble, he figures, will give him more clarity about his investments.
“Network effects are very positive things, but there’s a tipping point where they fall over into the madness of crowds,” he said.
Another of Thiel’s contentious ideas was destroying Gawker, the online publisher. He secretly financed the privacy lawsuit that Hulk Hogan, the former pro wrestler, filed against the media company, which Hogan won. That led to Gawker’s bankruptcy in 2016.
A news operation that specialized in deflating the arrogance of Silicon Valley should have been to Thiel’s liking. But he argues that his philosophy is consistent here.
“Gawker was trying to cut people down to size for not conforming,” he said. “The ability to speak and not have every word you say get distorted, to have wrong ideas and then be able to correct them — these notions were powerfully undercut by Gawker.”
Thiel is still pursuing the remnants of Gawker in court, which has prompted accusations that he wants to remove all its content from the Internet as a final victory. He denied this. “Terry Bollea, a.k.a. Hulk Hogan, is still owed some money from the Gawker sale, and that is what I am trying to get,” he said. “I don’t want the archives. I don’t think it makes sense to destroy them. Preserve them, study them instead.”