From: allin
Peter Thiel, a prominent technology investor and entrepreneur, offers a unique perspective on risk-taking and fostering innovation. Known for co-founding PayPal and being the first outside investor in Facebook, Thiel emphasizes the importance of agency and contrarian thinking in a rapidly evolving world [00:00:16].
Philosophy on Risk
Thiel posits that in a world undergoing rapid change, “the biggest risk you can take is not taking any risk” [00:00:05]. He believes that the future is not predetermined and human agency plays a crucial role in shaping it [00:00:31]. He advocates for actions that create something entirely new, posing questions like “how do you get from Z to one” [00:00:39] and “what great business is nobody building” [00:00:41].
Business Innovation and Monopoly Power
Thiel identifies “one-of-a-kind companies” as those that succeed [00:00:36]. He seeks answers to the question: “Tell me something that’s true that nobody agrees with you on” [00:00:42]. For Thiel, true innovation leads to a unique position in the market.
In the context of AI, he highlights that currently, only one company, Nvidia, is making significant profits, suggesting a monopoly on the hardware/chip layer, while others are “collectively losing money” [00:21:02]. He questions the durability of such a monopoly and how others might copy their success [00:42:27].
Views on Technology
Thiel expresses skepticism towards overused buzzwords like “Big Data,” “cloud computing,” and historically, “AI,” often viewing them as signs of “bad groupthink” [00:17:07].
Artificial Intelligence (AI)
He notes that the current state of AI, particularly with large language models (LLMs) like ChatGPT, represents a significant development by effectively passing the Turing test, which was the long-held definition of AI for decades [00:18:28]. He believes AI is “extremely important” and “very disorienting” [00:21:21].
Comparing the current AI boom to the internet in 1999, Thiel suggests it’s a “really big” and “very important” transformation that will unfold over 20 years, not 6 months [00:20:26]. The challenge, from an investor’s perspective, is “how do you make money with this stuff” [00:20:03].
Tech Stagnation: Bits vs. Atoms
Thiel believes there has been an era of “relative Tech stagnation” over the last 40 to 50 years [00:26:44], famously stating, “they promised flying cars all we got was 140 characters” [00:26:51]. He distinguishes between innovation in the “world of bits” (computers, internet, mobile internet, crypto, AI) which has seen “significant but somehow narrow cone of progress,” and the “world of atoms,” which has been slow [00:27:51]. Fields like chemical, mechanical, aeroastro, and nuclear engineering were “bad ideas” for undergraduates in the late 1980s [00:28:14].
He attributes this stagnation in the “world of atoms” to:
- Over-regulation [00:28:31].
- The idea, post-World Wars and nuclear weapons, that “not all forms of technological progress were simply good” [00:29:03], leading to a more “risk-averse society” by Woodstock in 1969 [00:29:21].
Challenges to Innovation
Thiel points to systemic issues hindering innovation:
- Government and Universities: He observes that innovation primarily happens in “relatively small companies” with “relatively small teams” pushing boundaries, rather than in universities or government, unlike in the 1940s [00:24:29]. He believes universities are “far worse” than he initially thought [00:33:32] and that higher education is a “bubble” fueled by runaway student debt, much of which should be forgiven, with costs borne by universities and bondholders, not just taxpayers [00:33:45].
- Economic Landscape: He suggests the U.S. economy is “very deeply stuck” due to high debt and lack of sustainable growth [00:31:32], stressing the need for tech innovation [00:31:19]. Past “one-time” economic boosts from tax cuts/deregulation (1980s) and globalization (1990s) are no longer viable strategies [00:31:43].
Outlook on the Future
Thiel rejects both extreme optimism and extreme pessimism, viewing them as “excuses for laziness” [00:45:19]. Instead, he believes in “human agency” and that the future “is up to us” [00:45:02]. His focus remains on understanding and fostering environments where people can create new things and overcome challenges.