彼得·蒂尔：科技投资、政治与 2024 大选

Peter Thiel (00:00:00): Peter was Speaker 2 (00:00:00): the person who told me this really pithy quote. In a world that's changing so quickly, the biggest risk you can take is not taking any risk. Peter Thiel (00:00:12): This guy is a tough nut to try to sort of explain. Speaker 2 (00:00:16): Change money with PayPal. He was the 1st outside investor in Facebook, back Palantir, which is I believe they helped find Osama bin Laden. Peter Thiel (00:00:24): Almost certainly the most successful technology investor in the world. I don't think the future is fixed. And I think what matters is a question of agency. What I think works really well are sort of one of a kind companies. How do you get from 0 to 1? What great business is nobody building? Tell me something that's true that nobody agrees with you on. Jason Calacanis (00:00:46): Alright, Peter. Welcome back. It's good to see you. You don't do this too often, so we do appreciate it. But when you do do it, you're always super candid, and we appreciate that as well. You fit right in here. You're sitting this year's political cycle out. Right in the Well, no. I mean, I think this is a question we all have, which is you were very active. You bet on JD in a major way. He delivered today. It was a very impressive, discussion. Why aren't you involved this this cycle? It's very confounding to us because these are your guys. Peter Thiel (00:01:25): Man, how much time do we have? This was let's talk about this for 2 hours or something. I I don't know. Look, I have a lot of conflicted thoughts on it. I I am still very strongly pro Trump, pro, pro JD. I've decided not to donate any money politically, but, I'm supporting them in every other way, every other way possible. I you know, Obviously, you know, I think there's my pessimistic thought is that Trump is going to win and probably will win by a big margin. He'll do better than the last time, and they'll still be really disappointing. Because, you know, the elections are always a relative choice. And then when someone's president, it's an absolute. And you get evaluated, you know, do you like Trump or Harris better? And that seems there seem to be a lot of reasons, you know, and that one would be more anti Harris than anti Trump. Let's again, no one's pro any of these people. It's all it's all negative. Right? Yeah. And, but then after after they win, there will be a lot of buyer's remorse and disappointment. That's sort of that's sort of the arc that I I see of what's gonna happen, and it's it's somewhat under motivating. I don't know. Just to describe describe it, I I think, you know, I think it's I think the odds are slightly in favor of Trump, but it's basically 5050. My one contrarian view on the election is that it's not going to be close. You know, most presidential elections aren't. And, you know, one side just breaks. You know, 20 2016, 2020, we're super close, but 2 thirds of the elections aren't. And, you know, you can't always line things up and figure it out. I think either the, you know, the Kamala bubble will burst or, you know, maybe maybe the Trump voters get really demotivated and don't show up. But I think, you know, one side is is simply going to collapse in the next, in the next 2 months. And then, you know, if you want to get involved, you know, with all the headaches that come with being involved, if it makes a difference counterfactually, and if it's a really close election, everything makes a difference. If it's if it's not even close, I don't think it makes much of a difference. If it is gonna be close, by the way, if it's if it's, like, gonna be a razor thin close election, then, then I'm pretty sure, comma will win. Peter Thiel (00:03:37): Because, because they will cheat, they will fortify it, they will steal the ballots. And so so, so, David Friedberg (00:03:43): you know, Peter Thiel (00:03:43): if if we if if we can if we can if we can if we can answer them in the event that it's close, I don't want to be involved. In the event that it's not close, I don't need to be involved. And so that's sort of a straightforward analysis. There's a bridge right there. Jason Calacanis (00:03:58): My jumping off point, how much cheating on a percentage basis do you think happens every year? How much and do you think Trump actually won't have time? Peter Thiel (00:04:07): With the verb. So, you know, cheating, stealing, that implies something happened in Jason Calacanis (00:04:12): the dark night. Massage. Peter Thiel (00:04:14): I think the verb you're allowed to use is fortify. Jason Calacanis (00:04:16): Okay. Yeah. We don't Peter Thiel (00:04:17): wanna be elected. On YouTube. Ballot harvesting. David Friedberg (00:04:20): I mean, Peter Thiel (00:04:20): it was you know, it's all sort of there were all these rule changes that were sort of done in plain daylight. And, but, yeah, I think I think our elections are not they're not perfectly clean. Otherwise, we could examine it. We could have vigorous debate about it. Jason Calacanis (00:04:33): Well, what would you change then? What what should change? Because we all want everybody's votes to count. We want it to be clean. I'm I'm talking about the audience here. Peter Thiel (00:04:42): At a minimum, you'd you'd run them You'd try to run elections the same way you do it in every other Western democracy. You have one day voting. You have practically no absentee ballots. You have, and, and it's, you know, it's it's it's it's one day where everything happens. It's not this, 2 2 month elongated process. That's what the way you do it in every other country. You'd have you'd have some somewhat stronger voter ID and, you know, make sure that, you know, the people who are voting have a right to vote. Make it a national holiday. That's that's basically that's basically what you do in every other western democracy. And it's it's it it used to be much more like that in the US. I mean, it's it's meaningfully decayed over the last 20, 30 years. The 20, 30 years ago 30, 40 years ago, you you got the results on the day of of the vote, and that sort of stopped happening a while ago. David Friedberg (00:05:32): What would make you not disappointed? So Trump gets elected. How do you what's your counter narrative on, you know, we're a year or 2 years past the election, Trump is president. What what makes you say I'm surprisingly not disappointed? What takes place? Man, it's, Peter Thiel (00:05:53): you know, it's I I I think there are some extremely difficult problems that it's it's it's really hard to know how to how how to solve them. I wouldn't know what to do. But, we have, you know, we have an incredibly big deficit. And, and, yeah, if you can if you can find some way to meaningfully reduce the deficit with no tax hikes David Friedberg (00:06:16): And without without GDP contraction? Well, Jason Calacanis (00:06:19): you you would do Peter Thiel (00:06:19): it if you got a lot of GDP growth, maybe. Right. But, if you could if you could meaningfully reduce the deficit with with, with no with no tax hikes, that would be, that would be very impressive. You know, I I think we're sort of sleepwalking into Armageddon with, you know, Ukraine and, the conflict in Gaza are just sort of the warm ups to the China Taiwan war. And, and so if, if if Trump can find a way to head that off, that would be incredible. If if they don't go to war in 4 years, that that would be that would be better than I would expect, possibly. Jason Calacanis (00:06:53): In relation to Taiwan, if Trump called you and asked, should we defend it or not, in this acute case, would you advise to let Taiwan be taken by China in order to avoid a nuclear holocaust and World War 3? Or would you believe that we should defend it and defend free countries like that? Peter Thiel (00:07:14): Well, I I I think, I think you're probably not supposed to say Wait. Jason Calacanis (00:07:18): But you're Peter Thiel. Peter Thiel (00:07:19): No. No. No. If you no. If you, you I I I think look, I think there's so many ways our our policies are messed up. But probably, you know, the one the one thing that's roughly correct on the Taiwan policy is that, we don't tell China what we're gonna do. And what we tell them is we don't know what we'll do, and we'll figure it out when you do it, which is probably has the virtue of being correct. And, and then I think if you had yeah. If you had a red line at Quemoy Matsu, the island, you know, 5 miles off the coast of China, that's unbelievable. If you, if you, if you say we want some guardrails and we won't defend Taiwan, then they get invaded right away. So I think I think I think the policy of, Chamath Palihapitiya (00:08:01): not saying what your policy Peter Thiel (00:08:03): is and, maybe not even having a policy, in some ways Ambiguity is is relatively the best. Yeah. I I I think anything anything anything precise you say, that's gonna just lead to war right away. But what do you believe? I, Jason Calacanis (00:08:17): Worth defending or not worth starting the conflict? Democracy in this tiny island? Worth going to war over or not? According to Peter Thiel. Peter Thiel (00:08:25): It's, it's not worth, it's not worth World War 3. And I I still think it's it's, quite catastrophic if it, if it gets taken over by the communists. How does the world Those can both be true. David Friedberg (00:08:37): How does the world divide if we end up in, heightened escalation? Is China, Russia, Iran, friends, is that an ally is that an axis that forms you know, think out the next decade in kind of your base case and, you know, estimate how the world will operate. Peter Thiel (00:08:55): I don't know what happens militarily if there's a China Taiwan invasion. I mean, may maybe we roll over. Maybe it escalates, you know, all the way to nuclear war. Probably, it's it's, you know, some very messy in between thing, sort of like what what you have in in the Ukraine. What I what I think happens economically is very straightforward. I think, I think basically, you know, you have with Russia and Germany, you had one North Stream pipeline, and we have the equivalent of a 100 pipelines between the US and China, and they they all blow up. Now I I met the TikTok CEO about about a year ago. And, you know, I not maybe I wouldn't have said this now, but what what I told him and what I felt was very honest advice was, you know, you don't need to worry about the US. We're never gonna do anything about TikTok. We're too incompetent. But, but but if I were in your place, I would still get the business out of China. I would get the computers out, the people out. I'd completely decouple it from ByteDance because, TikTok will be banned 24 hours after the Taiwan invasion. And if you think there's a 50 50 chance this happens, and that will destroy, you know, 100% of the value of the TikTok franchise Jason Calacanis (00:10:07): What was his reaction? Peter Thiel (00:10:10): You know, he said that they had done a lot of simulations and a bunch of companies in World War 1 and World War 2 that managed to sell things to both sides. Jason Calacanis (00:10:19): He doesn't seem so bright to me. Do you think he's, so he got no, he don't understand. What is your take Peter Thiel (00:10:24): on him? He he didn't disagree with my frame. So I always I always find that flattering if someone basically agrees with my framing. So he seemed he seemed perfectly bright to me, even though Jason Calacanis (00:10:32): Game theory. But not not Peter Thiel (00:10:33): not not David Friedberg (00:10:34): but game theory. But what what A lot of bright people are all Peter Thiel (00:10:37): wrong about that. David Friedberg (00:10:38): I saw you give a talk last summer with Barry Weiss, and you talked about this decoupling should be happening. You weren't saying should. You were recommending that every industry leader consider decoupling from China. I think your comment was, it's like picking up nickels in front of a freight train. Do you remember saying that? Peter Thiel (00:10:55): Well, I think Look, there are a lot of different ways in which businesses are coupled to China. There were investors that tried investing. There are people who tried to compete within China. There are people who built factories in China for export. And, you know, there are different parts of that that worked to, to to varying degrees. But, but, yeah, my, my I I certainly would not try to, to invest in a company that competed domestically inside China. I think that's that's virtually impossible. I think it's probably quite tricky even to invest in Chinese Chinese businesses. And then and then there is there is sort of this model of, you know, building factories in China, for export to the West. And it was it was a very big arbitrage. These things do work, you know. I visited the Foxconn factory 9 years ago, and it's, you know, you have people get paid a dollar and a half, $2 an hour, and they work 12 hours a day. And they live in a dorm room with 2 bunk beds where, you know, you get 8 people in the dorm room, someone's sleeping in your bed while you're working, and vice versa. And, and you sort of realize they're really far behind us or they're really far ahead of us. And either way, you know, it's it's not that straightforward to just, shift the, the iPhone factories to the United States. Mhmm. So I I sort of understand, you know, why a lot of businesses ended up there and why why this is the arrangement that we have. But, but, yeah, my my my intuition for, you know, what is going to happen, without making any normative judgments at all, is it is going to decouple How inflationary will that be? It presumably is it's presumably pretty inflationary. Yeah. That's that's probably the you know, I don't I don't know. It's you'd have to sort of look at, you know, what the inelasticities of all these goods are. David Friedberg (00:12:58): So if that's true, what's Peter Thiel (00:12:59): the what's the policy reaction? It it may not be as inflationary as people think because, people always model trade in terms of, pairwise, in terms of 2 countries. So if you literally have to move the people back to the US, that's that's insanely expensive. I don't, you know, I don't know how much it would cost people to build an iPhone. Chamath Palihapitiya (00:13:17): Does India become a Peter Thiel (00:13:19): You just you just well, I think India is sort of too messed up. But you you shifted to, like, Vietnam, Mexico. There are, you know, there there are 5,000,000,000 people living in countries where the incomes are lower than China. And so, and so, you know, probably the, the negative sum trade policy we should have with China is, you know, we should just shift it to other countries, which is a little bit bad for the US, extremely bad for China, and let's say, really good for Vietnam. And that's kind of, and that's kind of the the negative sum policy that, that's going to manifest as this sort of decoupling happens. Jason Calacanis (00:13:58): Let's talk about avoiding it for a second here. Trump seems to be extremely good with dictators and authoritarians. Kim Jong Un seems like a big fan. I mean that in, like, as a compliment, as a superpower. Right? Like, he doesn't have a problem talking to them. He he connects with them, and they seem to like them. So what would be the path to him working with Xi to avoid this? Is there a path to avoid this? Because we were sitting here last year talking about this, and it just seems mind boggling that if everybody agrees that this is going to happen, that we can't figure out a way to make it not happen. Well, it's it's not just up Peter Thiel (00:14:36): to us. So, yeah, there is there is and so I don't know. It's it's it's obviously somewhat of a black box. We don't exactly we we I I I feel we just have no clue what people in in in China think. But, but I I I think it's sort of the the sense of history is is strongly the sort of Thucydides trap idea, that you have a rising power against an existing power, and it tends to you know, it's it's Wilhelmin Germany versus Britain before World War 1 and, you know, it's, you know, Athens against Sparta, the rising power against the existing power, you you tend to, get conflict. That's that's probably what deep down, I think, is is really, really far in the China DNA. So so I'd say maybe maybe the first, I don't know, the meta version would be the first the first step to avoiding the conflict would be we have to we have to start by admitting that China believes the conflict's happening. Right. And then if if people like you are constantly saying, well, we just need to have some happy talk. David Friedberg (00:15:42): Right. Peter Thiel (00:15:42): That's that is a recipe that's a recipe for world war crimes. Jason Calacanis (00:15:46): I'm not advocating happy talk necessarily. I get accused of being Speaker 2 (00:15:51): a bit more hawkish, Peter Thiel (00:15:52): but Obviously obviously, in in general, you know I don't know. I'm not I'm not sure Trump should talk to the North Korean dictator. But, yeah, in general, it's probably a good idea to to try to, talk to people even if they're they're real really bad people most of the time. And, and, you know, it's it's certainly, a very odd dynamic with the US and and, and Russia at this point where, I I think it is impossible for anybody in the Biden administration even to have a back channel communication with, with people. Like, I I don't think Tucker Carlson counts as an emissary from the Biden administration. And if anybody gets Tucker, or I don't know what the verb is, who talks, you know, that's that's that seems that seems, worse than the alternative. Chamath Palihapitiya (00:16:38): Can we, talk about technology? You have this you you have a speech where you talk about some of the misguided things we've done in the past in the name of technology and use, like, big data as an example of that. What is AI? Peter Thiel (00:16:56): Oh, man. That's that's sort of a big question. I, it's, yeah. I I always I I always had this riff where I I don't like the buzzwords. And, you know, machine Learning. Learning, big data, cloud computing. You know, I'm gonna build a mobile app, bring the cloud to, you know, if you have sort of a concatenation of buzzwords, you know, my my first instinct is just to run away as fast as possible with some really bad groupthink. And, and for many years, my bias is probably that AI was one of the worst of all these buzzwords. It meant, you know, the next generation of computers, the last generation of computers, you know, anything in between. So it's meant all these all these very different things. If we roll the clock back to the 2010s, David Friedberg (00:17:47): you know, the, Peter Thiel (00:17:49): probably the AI to the extent you concretize it, I would say the AI debate was maybe framed by by 2 the 2 books, the 2 canonical books that framed it. There was the Bostrom book, Superintelligence 2014, where AI was going to be this superhuman, super duper intelligent, thing. And then, the anti, Bostrom book was the Kai Fu Lee 2018 AI Superpowers. We can think of the CCP rebuttal to Bostrom, where basically AI was going to be surveillance tech, face recognition, and China was going to win because they had no qualms about applying this technology. And, and then, if we now think about what actually happened, let's say, with the LoMs and chat GPT, it was really neither of those 2. And it was this in between thing, which is actually what people would have defined AI as for the previous 60 or 70 years, which is passing the Turing test, which is this somewhat fuzzy line. It's a computer that can pretend to be a human, or that can fool you into thinking it's a human. And you know, even with the fuzziness of that line, you could say that pre chat gpt wasn't passed, and then chat gpt passed it. And that seems that seems very, very significant. And, and then obviously it leads to all these questions. What does it mean? You know, is it gonna is it gonna complement people? Is it gonna substitute for people? You know, what does it do to the labor market? David Friedberg (00:19:17): Do you get paid more Peter Thiel (00:19:18): or less? So they're all these all these questions. But, it, it seems extremely it seems extremely important. And it's probably, you know, certainly the big picture questions which I think Silicon Valley is always very bad at talking about is like, you know, what does it mean to be a human being? Right. Sort of the I don't know. The stupid 2022 answer would be that humans differ from all the other animals because we we're good at languages. If you're a 3 year old or an 80 year old, you speak, you communicate, we tell each other stories. This this this is what makes us different. And so, so yeah, I think there's something about it that's, incredibly important and and very disorienting. You know, the question I always have is, the narrower question I have as an investor is sort of how do you make money with this stuff? And, Chamath Palihapitiya (00:20:07): How do you make money? Peter Thiel (00:20:08): I it's, it's pretty confusing. And I think I I don't know. This is always where I'm anchored on the late nineties as sort of the formative period for me. But, I I I keep thinking that, AI in 2023, 2024 is like the Internet in 1999. It's it's really big. It's going to be very important. It's going to transform the world, not in 6 months, but in 20 years. And then, there are probably all kinds of incredibly, catastrophic approximations where, you know, what businesses are going to make money, you know, who's going to have monopoly, who's going to have pricing power is, you know, is is is is super unclear. Probably, you know, one layer deeper of analysis, you know, if attention is all you need. And if you're not post economic, you need to pay attention to who's making money. And in AI, it's basically one company is making NVIDIA is making over 100% of the profits. Everybody else is collectively losing money. And so, and so there's sort of a you have to do some sort of you should do you should try to do some sort of analysis. Do you go long Nvidia? Do you go short? You know, is it, you know, my monopoly question, is it a is it a really durable monopoly? You know, and and then I it's it's hard for me to know because I'm in Silicon Valley, and I haven't done anything we haven't done anything in semiconductors for a long time. So I have no clue. Chamath Palihapitiya (00:21:32): Do you, if you let's debuzzword the word AI and say it's a bunch of process automation. Let's just say that's version 0.1, where brains that are roughly the equivalent of a teenager can do a lot of manual stuff. What do you have you thought about what it means for, you know, 8,000,000,000 people in the world if there's an extra 1,000,000,000 that necessarily couldn't work or, like, whether that in political or economic terms? Peter Thiel (00:21:59): I don't know. The the the, I I don't know if this is the same. But this is, you know, the the history of 250 years, the industrial revolution. What was that it, you know, it it adds to GDP. It frees people up to do more more productive things. You know, maybe there's, you know, there was yeah. There was a I know there was a Luddite critique in the 19th century of the factories that people people are gonna be unemployed and wouldn't have anything to do with because the machines would replace the people. You know, may maybe the Luddites are right this time around. I'm I'm I'm I'm probably I'm probably pretty pretty skeptical of it. But, but, yeah, it's it's it's extremely confusing, you know, where where the gains and and losses are. There there probably are, you know, there there's always sort of a hobby. You can always just use it on your hobby horses. So I don't know the, you know, my anti Hollywood or anti university hobby horse is that, it seems to me that, you know, the, the AI is quite good at the woke stuff. And, it'll and and so, you know, if you wanna if you wanna be a successful actor, you should be maybe a little bit racist or a little bit sexist or just really funny. And you you won't have any risk of the AI replacing you. Everybody else will get everybody else will get replaced. And then probably I don't know. I don't know. Claudine Gay, the plagiarizing Harvard University president. You know, the AI is going to you know, the AI will produce endless amounts of, of these sort of, I don't even know what to call them, woke papers. And they they were already sort of plagiarizing one another. They were they were always saying the same thing over and over again. Jason Calacanis (00:23:43): They were using their own version David Friedberg (00:23:44): of AI. Flood the zone Peter Thiel (00:23:45): with with even more of that. And that, you know, I don't know. Obviously, they've been able to do it for a long time and no one's noticed. But I think at this point, it doesn't seem promising from a competitive point of view. Because obviously my hobby horse, so I'm just this may be just wishful thinking on my part. David Friedberg (00:24:03): What are Chamath Palihapitiya (00:24:03): the areas of technology that you're curious about? That your mind is like, wow, this is really I have to learn more, pay attention. Peter Thiel (00:24:12): You know, I always think, you want to instantiate it more in companies than, things or you know, if you ask sort of, like, where is where is innovation happening? You know, it it it in our society, it doesn't have to be this way, but it's it's, it's mostly in in in a certain subset of relatively small companies. We have these relatively small teams of people that are really pushing the envelope. And that's sort of what I find you know, inspiring about venture capital. And then you obviously, you don't just want innovation. You also want it to it to it to translate into good businesses. But that's where it happens. It somehow it doesn't happen in universities. It doesn't happen in government. You know, there was a time it did. I mean, you know, somehow in this very, very weird different country that was the United States in the 19 forties, you had, you know, somehow the army organized the scientists and got them to produce a nuclear bomb in Los Alamos in three and a half years. And, you know, the the way the New York Times editorialized after that was, you know, it's it's, you know, it was sort of an anti libertarian write up. It was, you know, there were, you know, obvious maybe if you'd left the prima donna scientists to their own, would take them 50 years to build a bomb, and, the army could just tell them what to do. And this will silence anybody who doesn't believe the government can do things. And, they don't write editorials like that in the New York Times anymore. But I think, yeah. But I think that's sort of that's that's sort of where where one where one should look at. I think it I think I think a crazy amount of it still happens in the United States. You know, and there's sort of you know, we've we've, you know, episodically tried to do all this investing. We've probably tried to do too much investing in Europe over the years. Peter Thiel (00:26:01): It's always sort of a junket. Sort of, it's a nice place to go on vacation as an investor. And, and it's it's it's it is very it's it's very I I don't have a great explanation, but it's a it's a very strange thing that, so much of it is still the US is somehow still the country where people do new things. David Friedberg (00:26:20): You, Peter, is that a team, organizational, social, evolutionary problem in the United States? What is the root cause of the failure to innovate in the United States relative to the expectation going back 70 years, 50 years, etcetera? From, you know, Jason Calacanis (00:26:37): the the David Friedberg (00:26:38): rocket ships and we're all gonna Peter Thiel (00:26:39): live Yeah. Well, this is always this is always is always one of the big picture claims ahead that we've been in an era of relative tech stagnation the last 40 or 50 years or the, you know, the tagline, that we hadn't And tech's no negative. Like, they promised us flying cars. All we got was a 140 characters, which is not an anti Twitter, anti x commentary. Even though the the way I used to always qualify it was that, at least, you know, at least it was at least a good company. You had, you know, 10,000 people who didn't have to do very much work and could just smoke marijuana all day. David Friedberg (00:27:09): Very similar to Europe. And so Peter Thiel (00:27:11): I think that actually that part actually did get corrected. But, but the very subtle. But I think I think, David Friedberg (00:27:20): like, what went wrong? Because you you point out that it's not a technology trend tracker that you think about. It's about people and teams that innovate and drive to outcomes based on their view of the world. And and what's gone wrong with our view of the world and our ability to organize to achieve the seemingly unachievable with very rare exceptions? Obviously, Elon's here later, but Peter Thiel (00:27:39): You know, it's it's it's it's over determined. The, the rough frame I always have, and again, it's not that there's been no innovation. There's been there's been a decent amount of innovation in the world of bits, computers, Internet, mobile Internet, you know, crypto, AI. So there's sort of all these, world of bits, places where there was, you know, a significant but sort of somehow narrow cone of progress. But it was everything having to do with atoms that was slow. And this was already the case when I was an undergraduate at Stanford in the late eighties. In retrospect, any applied engineering field was a bad idea. It was a bad idea to become a chemical engineer, you know, a mechanical engineer. AeroAstro was terrible. Nuclear engineering, everyone knew I mean, I think no one did that, you know. And, and and there's something about, yeah, the world of atoms that, you from a libertarian point of view, you'd say got regulated to death. They're probably, you know, there's there's some there's some set of arguments where, the low hanging fruit got picked and got harder to find new things to do. Although I always I always think that was just a sort of baby boomer excuse for for covering up for the the failures of that generation. And, and then, and then I think but I think maybe maybe, maybe a very big picture part of it was that, at some point in the 20th century, the idea got to call that not all forms of technological progress were simply good and simply for the better. And there's, you know, there's something about the 2 world wars and the development of nuclear weapons that gradually pushed people into this more risk averse society. And it didn't happen overnight, but, maybe a quarter century know, after the nuclear bomb, it's like really By Woodstock, it happened. By Woodstock, it happened. David Friedberg (00:29:32): Yeah. Because that was the same summer we landed on the moon. Peter Thiel (00:29:35): Yeah. Woodstock was 3 weeks after that. David Friedberg (00:29:37): Yeah. That that was the tipping point. Peter Thiel (00:29:39): Progress stopped and the Okay. Sex. Yeah. Jason Calacanis (00:29:41): Could we David Sacks (00:29:42): shift gears just to the domestic economy? What what do you think is happening in the domestic economy? And just as backdrop, we've had something like 14 straight months of downward revisions to jobs. The revisions are supposed to be completely random, but somehow they've all been down. Volley doesn't mean anything. There's also what's happening with with the yield curve, but I'll I'll stop there. What what what's your take on what's happening in the economy? Peter Thiel (00:30:08): You know, it's it's I mean, it's it's always hard hard to know exactly. Yeah. I suspect we're close to a recession. I've I've probably thought this for a while. It's it's being stopped by really big government spending. So, you know, in in May of 2023, the projection for the deficit in 20 fiscal year 24, which is October of 23 to September 24, was something like 1.51.6 trillion. The deficit's gonna come in about 400,000,000,000 higher. And so, which, you know, it was a sort of crazy deficit was projected and it was way off. And then somehow, and so if if if we had not found another 400,000,000,000 to add to, you know, this this crazy deficit at the top of the economic cycle, you know, you're supposed to you're supposed to increase deficits in a recession, not at the not at the top of the cycle. You know, think things would be probably very shaky. There's, yeah, there's there's there's some way where, we we yeah. We have, too much debt, not enough sustainable growth. You know, again, I always think it comes back to, you know, tech innovation. There probably are other ways to grow an economy without tech, or intensive progress. But I think they we we we don't have those don't seem to be on offer. And then that's that's where it's very deeply stuck. If you wind back over the last 50 years, there's always a question why do people not realize that this tech stagnation had happened sooner? And I think there were 2 one time things people could do economically that had nothing to do with science or tech. There was a 19 eighties Reagan Thatcher move, which was to massively cut taxes, deregulate, allow lots of companies to merge and combine. And and, it was sort of a one time way to make the economy a lot bigger even though it had it was not something that really had the sort of compounding effect. Peter Thiel (00:32:06): So it led to one great decade. And then there was, you know, and that was sort of the right wing capitalist move. And then, in the nineties, there was sort of a Clinton Blair, center left thing, which was sort of leaning into globalization. And there was a giant global arbitrage you could do, which also had, you know, a lot of negative externalities that came with it. But, it sort of was a one time move. I think both of those are are not on offer. I don't know. I don't necessarily think you should undo globalization. I don't think you should raise taxes like crazy. But, you can't you can't do more globalization or more tax cuts here. That's not gonna be the win. And and so I I think you have to somehow get back to the future. Jason Calacanis (00:32:48): We have time for a couple more questions. You, I think saw that maybe this Ivy League institutions maybe weren't producing the best and brightest or weren't exactly hitting their mandate. And you created the Thiel Fellows. You've been doing that for a while, and I meet them all because they all have crazy ideas and they pitch me for angel investment. What have you learned getting people to quit school, giving them a $100,000, and then how many parents call you and get really upset that their kids are quitting school? Peter Thiel (00:33:18): It's well, I've I've I've I've I've learned a lot. I mean, it's it's I don't know. I I I think I think the universities are far worse than I even thought when I started this thing. I think, Yeah. It's, you know, I I I did this, I did this debate at Yale last week, you know, resolved the higher education as a bubble. And, and, you should go through all the different numbers. And, the and then, you know, and again, I I was careful to word it in such a way that I I didn't have to, you and then people kept saying, well, what's your alternative? What should people do instead? And I said, nope. That's not was not the debate. I'm not, you know, I'm not your guidance counselor. I'm not your career counselor. I I don't know how to solve your problems. But, if something's a bubble, you know, the first thing you should do is probably not, you know, lean into it in too crazy a way. And, you know, the student debt was 300,000,000,000 in 2,000. It's, it's basically, close to 2,000,000,000,000 at this point. So it's just been this sort of runaway, this runaway process. And, and then if you look at it by cohort, if you graduated from college in 1997, 12 years later, people still had student debt, but most of the people had sort of paid it down. But the first by 2009 we started the Thiel Fellowship in 2010, and it, you know, it felt, 2 by 2009 was the first cohort where this really stopped. If you take the people graduating from college in 2009 and you fast forward 12 years to 2021, the median person had more student debt 12 years later than they graduated with. Because I I it's actually just it's just compounding faster. And it was, you know, partially partially the global financial crisis, the people who had less well paying jobs, they stayed in college longer. And the colleges it's just sort of been this background thing where it's it's decayed in these in these really significant ways. And, you know, again, I think I think it's on some level, there are sort of a lot of, debates in our society that are probably dominated by sort of a boomer narrative. And maybe the baby boomers were the last generation where college really worked. Peter Thiel (00:35:41): And, you know, they think, well, you know, I I worked my way through college and why can't why can't, why can't, you know, an 18 year old going to college do that today? And, and so I think the bubble will be done once the boomers have exited stage left. But does the government need to stop? It'd be good if we figured something out before then, you know? David Friedberg (00:36:02): Does does the government need to stop underwriting the loans? Because it's the lending. I think 90 plus percent of the capital in the student loan programs is funded by the federal government. And if you're an accredited university, you can take out a loan and go to it. And accreditation in a rigid kind of free market system, you would have an underwriter that says, are you going to be able to graduate, make enough money to pay your loan off? Is this a good school? Are you going to get a good job? And then the market would figure out whether or not to give you a loan, would figure out what the rate should be, and so on. But in this case, the government simply provides capital to support all of this, and as a result, everything's gotten more expensive and the rigidity in the system that basically qualifies schools and the quality of those schools relative to the earning potential over time is gone. So we need the government to get out of, like, the student loan business. Peter Thiel (00:36:52): Yeah. But look, the place the place where I'm yeah, I I know. I'm sort of some ways I'm right wing, some ways I'm left wing on this. So the the place where I'm left wing is I do think a lot of the students got ripped off. And, and so I think there should be some kind of broad, related debt forgiveness at this point. Jason Calacanis (00:37:09): We should pick up the tab. Peter Thiel (00:37:10): But it's not just the taxpayers. It's the universities, and it's the the the bondholder. Speaker 2 (00:37:16): Got it. The bondholder. Take a little bit out of those endowments. Of the universities. Peter Thiel (00:37:20): And, And then obviously, if you just make it to taxpayers, then, then you'll just then the universities can just charge more and more of Jason Calacanis (00:37:28): the government. Peter Thiel (00:37:28): There's no incentive to reform whatsoever. But, you know, in 2005, it was under Bush 43 that the bankruptcy laws got rewritten in the US, where you cannot discharge student debt even if you go bankrupt. And if you haven't paid it off by the time you're 65, your social security wage checks will be garnished. It's crazy. So, so, you know, I I I do think, But David Friedberg (00:37:52): should we stop lending? Should the federal government get out of the the student lending business? Peter Thiel (00:37:56): Well, if if if we if we say that, if we if we start if we start with My Place where, you know, a lot of the student debt should be forgiven, And then and then And then reform the whole program. And then we'll see how many people are willing to lend. You know, how how much how many the colleges can, pay for all the David Friedberg (00:38:13): students' tuition. What's your sense if if it was a totally free market system, how many colleges would shut down? Because they wouldn't be able to there's no tuition support. Peter Thiel (00:38:25): It it probably would be a lot smaller. It it it might it might you you might not have to shut them down because there's you know, a lot of them have gotten extremely uploaded. It's like Baumol's cost disease where, you know I don't know if you I I have no idea. Like, the place like UCLA, it probably has, you know, twice or 3 times many bureaucrats as they had 30, 40 years ago. So there's sort of all there's sort of all these sort of, parasitic people that have sort of, gradually accrued. And, and, and and so there's probably a lot of there would be a lot of rational ways to dial this back. But, but, yeah, you know, maybe We're gonna need a Jason Calacanis (00:39:02): new location for next year. Peter Thiel (00:39:03): If the only if the only way to lose weight is to cut off your thumb, that's kind of a difficult way to go on Jason Calacanis (00:39:08): a dial. Peter, 3 of your collaborators, long time collaborators, Elon Musk, Mark Zuckerberg, and, Sam Altman are arguably the 3 leading AI language model, leaders. Which one is gonna win? Rank them in order and tell us a little bit about each. Peter said he would answer any question. Peter Thiel (00:39:35): I I I said he would take any question. I didn't say to answer any question. Jason Calacanis (00:39:40): You said you would honestly you said today you felt extremely honest and candid. So let's Peter Thiel (00:39:44): I I Yeah. But I've already been extremely honest and candid, so I think that's it. Quarterback. It's it's it's whoever I talked to last. Jason Calacanis (00:39:53): Okay. Well, okay. Why don't you Peter Thiel (00:39:54): they're all very, very convincing people. So, you know, I create I don't know. I I'm gonna talk a little bit about I talked to Elon a while ago, and and, you know, and it was it was just, how ridiculous it was that Sam Altman was getting away with turning OpenAI from a nonprofit into a for profit. That was such a scam. If everybody was allowed to do this, everybody would do this. That it has to be totally illegal what Sam's doing, and it shouldn't be allowed at all. And that seemed really, really convincing in the moment. And then sort of half an hour later, I I thought to myself, but, you know, actually, man, it was it's been such a horrifically mismanaged place at OpenAI with this preposterous nonprofit board they had. Nobody would do this again. And so there actually isn't much of a moral hazard from it. So but, yeah, whoever whoever I talk to, I find very convincing in the moment. David Sacks (00:40:50): Will will that space just get commoditized? I mean, do you see a path to a monopoly there? Peter Thiel (00:40:55): Well, again, this is this is again where, you know, you should you know, attention is all you need. You need to pay attention to who's making money. It's NVIDIA. It's it's the hardware, the chips layer. And, and, and then that's just it's just what we you know, it's not what we've done in tech for for 30 years. David Friedberg (00:41:15): Are they making a 120% Peter Thiel (00:41:16): of the profits? They're they're make they're I think everybody else is losing money collectively. Yeah. Everyone else is just spending money on on the computer. So it's it's one it's one company that's making I mean, maybe there's a few other people that are making some money. I mean, I assume TSMC and ASML. But but, but, yeah. I think everyone else is collectively losing money. Jason Calacanis (00:41:34): What do you think of Zuckerberg's approach to say, I'm so far behind. This isn't core to my business. I'm gonna open source it. Is that going to be the winning strategy? It's candy cap that for us. Peter Thiel (00:41:48): Again, I I I I I would say, my, again, my my my big my my big qualification is, you know, my model is AI feels like it does feel uncomfortably close to the bubble of 1999. So I'm we haven't invested that much in it. And, I want to have more clarity in investing. But the simple, simplistic question is, you know, who's going to make money? You know, I think a year ago, 2 years ago in retrospect, NVIDIA would have been a good buy. You know, I think at this point, everybody it's it's sort of too obvious that they're making too much money. Everyone's gonna try to copy them on on the chip side. Maybe that's straightforward to do. Maybe it's not. But that's no. I'd say probably, you should if you want to figure out the AI thing, you should not be asking this question about, you know, meta or open air or any of these things. You should really be focusing on the NVIDIA question, the chips question. And the fact and the fact that we're not able to focus on that, that that tells us something about how we've all been trained. You know, I think NVIDIA got started in 1993. David Friedberg (00:42:56): Yeah. Peter Thiel (00:42:57): I believe that was the last year where anybody in their right mind would have studied electrical engineering over computer science. Right? 94, Netscape takes off. And then, yeah, it's probably a really bad idea to start a semiconductor company even in 93. But the benefit is there was gonna be no one would come after you. No no talented people started semiconductor companies after 1993 because they all went into, you know, into software. David Friedberg (00:43:21): Score their monopoly power. Peter Thiel (00:43:26): It's I I I think it's quite strong because this this this history that I just gave you where none of us know anything about chips. And then I think the, you know, I think the risk, it's always you know, attention is all that you need. The qualifier to that is, you know, when you get started as an actress, as a start up, as a as a company, you need attention. Then it's desirable to get more. And at some point, attention becomes the worst thing in the world. And there was the one day where NVIDIA had the largest market cap in the world earlier this year. And I do think that represented a phased transition. Once that happened, they probably had, more attention than was good. Jason Calacanis (00:44:14): Hey, Peter. As we wrap here, your brain works in a unique way. You're an incredible strategist. You think, you know, very differently than, a lot of the folks, that we get to talk to. With all of this, are you optimistic for the future? I Peter Thiel (00:44:34): I always, man, I always push back on that question. I I, I think I think extreme optimism and extreme pessimism are both really bad attitudes. And they're somehow the same thing. You know, extreme pessimism, nothing you can do. Extreme optimism, the future will take care of itself. So if you have to have one, it's probably you want to be somewhere in between. Maybe mildly optimistic, mildly pessimistic. But, you know, I I believe in human agency and that it's up to us. And it's not, you know, it's not some sort of winning a lottery ticket or some astrological chart that's gonna decide things. And, I believe in human agency. And that's, sort of an axis that's very different from optimism or pessimism. What a great place. Optimism, extreme pessimism, they're both excuses for laziness. Jason Calacanis (00:45:23): What an amazing place to end. Speaker 2 (00:45:24): Ladies and gentlemen, give it up for Peter Till. Thank you. Thank you, Peter. Come on now. Thanks, John. Wow. Alright. Peter Till.