Attack of Silicon Valley’s tech giants

Over the past decade, some of Silicon Valley’s brightest ideas have evolved into the biggest, most powerful companies on the planet. And as the likes of Amazon, Google and Facebook continue to infiltrate almost every aspect of our everyday lives, they might promise innovation, opportunity and convenience – but at what cost?

"DOES GOD EXIST?"

It’s a question many of us have asked at some point in our lives. But

Ray Kurzweil, renowned futurist and the godfather of Silicon Valley, thinks he already has the answer: ‘not yet.’ Kurzweil,

71, is the man who famously predicted that technological singularity – the point artificial intelligence becomes smarter than us – is going to happen. So, at least if he’s right, we’ll have to wait until 2045.

It seems a funny thing happened on the way to the future. Between dreaming up the next big startup concept, some of Silicon Valley’s finest minds have turned their disruptive zeal to metaphysics. Anthony Levandowski, a brilliant engineer who pioneered driverless cars at Google and Uber, has already built the altar. In 2017, he formed the Way of the Future Church, which wants to create ‘a peaceful and respectful transition of who is in charge of the planet from people to people + “machines”.’ Comforting stuff.

‘What is going to be created will effectively be a god,’ he told Wired magazine from his home in northern California. ‘It’s not a god in the sense that it makes lightning or causes hurricanes.

But if there is something a billion times smarter than the smartest human, what else are you going to call it?’

The invasion of the tech giants is underway. The figures looking to inflict the techno-apocalypse have ridden in not on horseback but on their “unicorns”, the name given to private tech companies that have reached a valuation of over Us$1bn. Since the term was coined six years ago to describe the phenomenon of Silicon Valley giants such as Facebook, Google, and Uber, their number has risen from 39 to 334 and counting – worth a combined Us$1tn.

Yet we know very little about them – and they know almost everything about us.

What we can be sure of is that we were promised this great tech revolution was going to be democratising. Instead it has been dehumanising. Author Shoshana Zuboff calls the effect that Silicon Valley technology has on our lives ‘surveillance capitalism,’ where people have been turned into instruments for generating data for private companies to sell to the highest bidder. If you’re not paying for it, as the old marketing adage goes, you’re the product.

Now home to nearly four million people, Silicon Valley is said house Us$3tn in wealth. South of San Francisco Bay, the region’s strategic location was long a hub for telegrams and communications in simpler times. A steady trickle of science and tech companies and government research labs were founded there across the 20th century, developing a symbiotic relationship with nearby Stanford University – perhaps now more famous for its dropouts, including Google co-founders Sergey Brin and Larry Page, Tesla owner Elon Musk, and now disgraced Theranos founder Elizabeth Holmes.

Companies such as Atari, Microsoft and

Apple were founded in the Valley in the 1970s, followed by Microsoft in the 1980s, before the apps that we can’t live without sprouting from its fertile soil as we rapidly moved our lives online.

Google and Facebook now receive 73 cents of every dollar in digital advertising revenue in the US, dominating a market that is generating more revenue than television, radio, and newspapers combined. The ad-tech model that fuels them favours emotive, personalitydriven, partisan stories that drive shares and likes. Complex algorithms run a simple business model, geared towards working out what you’re going to click next, and selling that information to businesses who want to know that. Sounds simple enough.

Only it’s not just the local pizza shop that wants to know what you’re thinking. Last July, Facebook agreed to a settlement in the United States Federal Trade Commission for Us$5bn for breaches associated with Cambridge Analytica – the shady political firm that used masses of Facebook data to secretly target voters in

200 elections around the world, most notably the Brexit referendum and 2016 US Presidential election. Although the largest tech company fine in history, Us$5bn is still just one month of revenue for Facebook – and just under a quarter of its Us$22bn profit in 2018.

No one serious is arguing that the elections were stolen by data firms, but it’s not a stretch to say that they have had some influence. The overarching goal of ad-tech, to predict our behaviour and to drive our clicks in certain directions, is working.

Take the re-election of the Liberal National Party in May. The results from Australia’s general election came as a surprise to most pollsters and journalists – Labor had been ahead of the coalition on every recent two-party preferred poll, except the one that mattered – but not to Griffith University data analyst Professor Bela Stantic. Stantic had also previously predicted Donald Trump’s election and Brexit by using data on what people had searched for on social media. The most-searched story in Queensland in the lead up to polling day was a false claim about Labor’s death tax. Labor was trounced in the state.

‘It is scary how accurate prediction can be done by analysing social media,’ he told reporters at the time. ‘The amount of data that all of us generate is truly staggering, and it is continuing to grow.

This publicly available data is secret treasure of information if we know how to discover it.’

‘One of the defining cultural features of Silicon Valley is technosolutionism – the idea that problems can and should be solved technologically, or technocratically,’ says Douglas Rushkoff, academic and author of Team Human. ‘Things can’t simply remain in a state of compromise or imperfection, they have to be somehow “fixed”. In their view, people are the problem, and technology is the solution.’

The unpredictable and the unknown have to be eliminated. Everything needs to be reduced to a metric in order for it to exist. ‘Today’s digital companies are not selling products to consumers – they are selling their stock to investors. It’s the company itself that’s for sale. Likewise, we consumers are for sale.

It’s not more money they want, it’s our data. We are being colonised.’

Facebook was built to exploit ‘vulnerability in human psychology’, its founding president, Sean Parker, admitted last year. ‘It literally changes your relationship with society, with each other. God only knows what it’s doing to our children’s brains.’ Social media platforms use algorithms similar to those used in poker machines that ‘give you a little dopamine hit’ every time someone hits the like button to keep us engaging with the platform.

‘Ultimately, it’s a form of fascism,’ Rushkoff says. ‘Silicon Valley values push both sides of the political spectrum toward fascist extreme. It’s really two, circular firing squads. No room for error. No one can have a past.’

Levandowski says that he is sympathetic to the pushback against Silicon Valley and everything it represents. ‘Tech companies are extremely powerful, and it can be difficult and personally very risky to attempt to drive change from within or from outside,’ he told GQ through several layers of public relations consultants. ‘Silicon Valley is built around an ethos of disruption and overselling an automation utopia.’

It’s not only ethos that appears unsustainable – the economics are questionable too. Ever since Steve Jobs, many tech pioneers have been able to operate under the assumption that their leadership adds value to the company’s stock that will be realised over time. Elon Musk built Telsa – after he wrestled control of the company from its founder – on this basis, and it has little to show for great expense, other than his reputation as a tech billionaire.

Tech startups usually work on two business models: collecting massive quantities of personal data without necessarily knowing how it might be used in the future, and creating monopoly industries. Investors are often playing a long game, which involves setting fire to a lot of money in the short term. Uber lost Us$1.8bn last year, with venture capitalists hoping to one day cash in on the riches of driverless vehicles, which many believe is Uber’s end game (and why it poached Anthony Levandowski from Waymo – Google’s self-driving car project – promoting a massive lawsuit that the two giants settled in 2018).

“Fail fast, fail often” is the ethos that echoes around the Valley, and it’s not hard to imagine that the unicorns may be galloping headfirst into bursting their own bubbles. But that leaves the not-so-small problem of us, and our consumerdriven society. Peter Thiel wrote in his book Zero to One that ‘every great business is built around a secret that's hidden from the outside’. For Silicon Valley, it is about extracting value out of our weakness.

The unicorn Peter

Thiel co-founded, Palantir Technologies, appears to have little trouble making a profit, taking mass surveillance and data collection to a new level. Palantir, which has 21 offices around the world, uses algorithms to trawl social media history, government records, facial recognition technology, and other mass data. Its programs have included top-secret predictive policing technology in New Orleans, mass surveillance in Los Angeles, secretly analysis of airline travellers for the US government, and identifying undocumented immigrants for deportation.

In addition to Palantir’s many government contracts, Thiel himself is a close ally of Donald Trump and something of an unofficial technology advisor to the president. In July last year, Thiel told one of Trump’s favourite Fox News programs that Google was ‘committing treason’ by working »

‘We consumers are for sale. It’s not more money they want, it’s our data. We are being colonised.’

with the Chinese government. Trump tweeted that he would investigate the claims, which Google has denied.

But the search engine has a long history of working with the only organisation that can rival its business for power and control: the US military. Google survived the Dot Com crash of 2001, and from that experience developed the scale and scope of the surveillance economy. Another big thing happened that year, and that event has helped further entrench the power of surveillance: the creation of Keyhole Earthviewer, the technology that would later become Google Earth. Today, Google sells its Google Earth technology to, among other things, help the US military fight the Iraq War, and the CIA’S top-secret operations.

Private tech firms like Palantir and Google have been able to carry out a lot of dirty work that military forces and spy agencies want to do in the post-9/11 world, without the constraints of constitutions and democratic governance. The trend towards privatisation and deregulation of business in recent decades has married up perfectly with the security state.

In a leaked video in 2015, Palantir CEO Alex Karp told employees that the CIA ‘may not like us. Well, when the whole world is using Palantir they can still not like us. They’ll have no choice.’

One of Google’s 10 guiding principles states that ‘you can make money without doing evil,’ which might seem slightly at odds with Project Maven, the lucrative Pentagon contract that saw it build AI for US military drones. (Google dropped the contract last year, following internal protests, but reportedly still lends its Google

Cloud technology to the program). But Silicon Valley often lives by the creed that it’s better to beg for forgiveness than ask for permission.

Venture capitalist

Roger Mcnamee, Mark Zuckerberg’s former mentor, outlined the typical tech industry public relations playbook whenever a company finds itself in trouble. ‘Deny, delay, deflect, dissemble.’ From there, only come clean when forced to, and reveal as little information as possible. Then ‘apologise, and promise to do better.’

Zuckerberg may have read the script to perfection in 2018 when he testified in front of the US Congress about the Cambridge Analytica scandal. ‘Yes, they did not want their information to be sold to Cambridge Analytica by a developer,’ he said. ‘That happened, and it happened on our watch.’

In spite of his polished contrition over 600 questions over two days, regulation of the tech giants now feels unavoidable.

But instead of looking to the future, we should look to the past. What’s known as “antitrust” legislation came into force in the US at the end of the 19th century to deal with the industrial titans of the time who had monopolies on critical services such as railroads.

‘There’s a reason we’ve started calling today the second Gilded Age,’ says historian Richard White. ‘The kind of inequality we associate with the Gilded Age has reappeared now. Silicon Valley becomes one symbol of the sort of vast fortunes, and how far away they are from the reach of most working people.’

White says there are many parallels between the ultra-wealthy of then and now, particularly when it comes to ostentatious consumption and extreme inequality. ‘People back then began to resent a privileged group of people having control over things that are essential to the society as a whole. My sense today is that both on the left and on the right, you're getting stirrings of a new kind of anti monopolisation. The kind of power and control that these companies have achieved is dangerous, and it has to be curtailed.’

Sarah Miller, deputy director of the Open Markets Institute, a think tank devoted to curbing big tech’s economic dominance, says that firms are uniquely equipped to get away with breaching our trust. ‘Consumers don't have any power in the way that they would in a functioning market, where if they’re unhappy with the way customers or workers are being treated, they can take their business elsewhere.’

Since the Reagan era, antitrust legislation has rarely been used in the US in favour of a total embrace of the free market. Miller says that mergers, such as Facebook buying Instagram and Whatsapp, have meant that it is almost impossible to get through your day without encountering, either knowingly or unknowingly, one of these large technology platforms.

‘Lawmakers haven’t been asleep at the wheel, they’ve been in a coma,’ he says. ‘They have waved many, many kinds of anticompetitive and deeply concerning mergers through, and these companies have been able to cement monopoly power across several lanes of commerce, and utilise information flows that are incredibly dangerous for democratic societies.’

This lack of oversight is fast becoming an issue for the 2020 US presidential election, with leading Democratic primary contender Elizabeth Warren pushing to break up the big tech companies through antitrust law. President Trump regularly rage-tweets about regulating social media giants and Amazon, although Miller says that he already has the power to clamp down on these companies, but federal agencies are not politically inclined to do so.

Nor does there appear to be much of an appetite to introduce an offshoring tax. Amazon actually received a tax credit of US$129M last year on a profit of Us$11.2bn

– an effective tax rate of -1%. It is estimated that Us$237bn is lost around the world each year in multinational tax avoidance. Less money

‘Silicon Valley often lives by the creed that it’s better to beg for forgiveness than ask for permission’

coming into public coffers, combined with job losses from AI, are the perfect storm for a political and social crisis.

Even with the downturn in car manufacturing, General Motors still employs more people in the US than Apple, Facebook and Google combined. If Anthony Levandowski’s driverless trucks become a reality, some economists have estimated we could be looking at 40-50% of America’s 3.5 million trucking jobs – the most common profession for men in the country – becoming vulnerable over the next decade. Meanwhile, the other profession being rapidly automated, cashiers, is the most common job for women.

Linkedin co-founder Reid Hoffman believes that half of his colleagues have become “preppers”, building underground bunkers for a looming apocalypse – that is, financial and social collapse caused by staggering inequality, automation of jobs, and lack of faith in political and economic systems that govern us.

In rural Texas, Rising S Bunkers has become one of the largest makers of private shelters in the world, as the wealthy begin to build their own walls. ‘We get a lot of inquiries from people in Silicon Valley,’ says general manager Gary Lynch. ‘It’s liberty or death – and it’s up to you to come and take it.’

Lynch’s bunkers usually sell for up to US$14M, and are built into hills and underground in secret locations. In the event of a crisis, some want to get out of America completely. Lynch says that he has dropped bunkers by helicopter on to private islands, while Peter Thiel is one of a number of billionaires who have bought land in New Zealand to see out the apocalypse.

There’s no room for zombies in this future, because our billionaires are heavily invested in finding eternal life. Amazon founder Jeff Bezos has invested in firm developing a cure for ageing, along with Thiel, who injects the blood of teenagers in his quest to find the fountain of youth. ‘There are all these people who say that death is natural, it’s just part of life, and I think that nothing can be further from the truth,’ said Thiel said in 2012. ‘Death is a problem that can be solved.’

Perhaps aware that they have helped make the planet unlivable, some of our tech overlords have set their sights on leaving earth entirely.

‘Fundamentally the future is vastly more exciting and interesting if we’re a spacefaring civilisation and a multiplanet species than if we’re or not,” said Elon Musk, whose company Spacex is intent on colonising Mars. Bezos, meanwhile, wants to create floating colonies in space that can sustain agricultural land and residential settlements. ‘This is Maui on its best day all year long. No rain, no storms, no earthquakes.’

That the masters of our world have little faith in it should be cause for concern – yet some of the most optimistic people about the future are

Silicon Valley’s biggest critics. Shoshana Zuboff says that ‘if we name the problem of surveillance capitalism, we can do something about it,’ while Douglas Rushkoff thinks that the tech community is crying out for salvation.

‘They are at the mercy of their shareholders. The engineers and developers do not want to be doing the horrible things they’re doing. They feel really bad about contributing to the annihilation of the planet, its species, and our civilisation. But they’re in competition with one another, and so they feel they can’t stop. They would love for government to come onto the scene, and give them an excuse to stop killing us all.’

It is clear that it will take some sort of mass social and political movement to hit back at the big tech companies, and the ways in which they altering our lives, jobs, and cities. No matter how woke it may want to appear, its ideals fundamentally clash with our interests. If Silicon Valley could write an algorithm for a perfect world, is it one that would eliminate everything that makes us human?

‘The more automatically people react, the more predictably and mechanically, the easier it is to make money off them,’ says Rushkoff. ‘Technology is understood as a way to manipulate people’s behaviour, no matter the cost their autonomy or will.’

This is the hidden secret of Silicon Valley that Thiel says is central to every business: we are not only being invaded by robots, but we are being turned into them. We are being given eternal life as a datagenerating instrument that tells a machine how humans behave, and manipulates humans in how they behave. And if Ray Kurzweil is right, and machines become smarter than us, then the tech giants would have us become the programmable imitation of the smarter thing.

‘I think we should be very careful about artificial intelligence. If I had to guess what our biggest existential threat is, it’s probably that,’ warned Elon Musk back in 2014. ‘We’re summoning a demon.’