Peter Thiel doesn’t shy away from taking big bets. From Facebook (he was the company’s first outside investor) to Gawker (he successfully conspired to put the website out of business) and, of course, to Trump (he threw his support behind the nominee in 2016).
Unlike many in the Silicon Valley set, who often say the popular thing in public and the thing they actually believe behind closed doors, Thiel has used his voice and his fortune to steer the country in the direction he believes is right—despite tremendous blowback. That was true in last year’s midterms, when Thiel threw his support behind two anti-establishment Republican candidates: Arizona’s Blake Masters and Ohio’s JD Vance.
But the billionaire entrepreneur and investor tells me in this conversation that he’s changing course. When I asked him who he’d back in 2024, he demurred. He says he’s decided to step away from supporting select politicians and instead is urging the political right to shift its focus from the culture wars to issues he believes matters more: like economic growth and tech innovation.
We cover a lot in this conversation. Why does Thiel believe that Democrats are the evil party and Republicans are the stupid party? Why is our infrastructure so far behind other nations? And why are Americans so impressed by the apps on our phones instead of dreaming of the next Sputnik?
Also: A.I., China, TikTok, Twitter, the right way to defeat what Elon Musk musk calls the “woke mind virus” and what Thiel’s going to bet on next.
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Ms. Weiss I'm a long time listener and I love your show, but the need to "break our addiction to cheap stuff" has a certain "let them eat cake" ring to it.
Many people who've done quite well in this country will undoubtedly have no problem breaking their "addictions" to cheap stuff, but many students here are eating food and using school supplies purchased by teachers on the teachers' dime from Walmart on a daily basis.
The working poor are not "addicted" to cheap stuff. Rather, they're dependent on it, and increasingly so in an inflationary environment. Lack of access to the Chinese market is going to hurt low-income people the most.
In my opinion Bari completely misses the mark on China. There's been a qualitative shift in Chinese exports to America over the past 10-15 years or so. These days China is increasingly a source of high tech products like DJI drones or CATL batteries as opposed to cheap goods found at Walmart or Costco.
Given the dominance of China in the EV ecosystem, the Biden administration almost certainly can't realize its green goals without working with Chinese companies more closely rather than less. Despite that, Ford's recent plans to license CATL's battery technology for a Michigan plant have run into considerable headwinds in Congress. Plans for another Gotion battery plant near Big Rapids have also aroused the ire of nearby residents. Likewise, I highlighted Ron DeSantis' recent decision to ban the government use of all Chinese drones across the state of Florida despite numerous police departments emphasizing the essential nature of these drones in their day to day work and despite a lack of viable alternatives. We're now literally putting the lives of real Americans at risk because of political theater and anti-China hysteria. Yet very few people seem to care, even among the heterodox community.
Bari and Peter had a fascinating discussion about the relative lack of hard progress in recent years as opposed to so-called software innovations like Netflix or Snapchat. Peter also lamented at a recent dinner that American tech was increasingly focused on the soft stuff as opposed to the hard stuff. In my opinion this is less a global phenomenon than a reflection of the nature of the American economy. The Taiwanese produce over 60% of semiconductors worldwide and manufacture almost 90% of the most advanced ones, defined as those based on process nodes of 7nm or smaller. This from a country of only 24 million people or so. TSMC technology powers almost all of the modern day chips designed by American companies like Apple, Nvidia or AMD. Likewise, Chinese companies like CATL have around 55-60% of the global EV battery market and are major partners for American companies like Tesla. In particular, Chinese companies have played a crucial role in the shift towards LFP batteries which unlike their NMC counterparts contain no cobalt, a mineral whose mining has engendered considerable human suffering. While Silicon Valley seems to be disproportionately dominated by consumer-internet companies, the Chinese tech ecosystem has always been more focused on hardware. It's no surprise that Shenzhen is often referred to as the Silicon Valley of hardware.
This is why the notion that we have to decouple from China is so wrong, both morally and historically. Decoupling from China doesn't mean breaking our addiction to cheap goods. Increasingly it means turning our backs on the future and on the very things that could uplift the masses in this country. Yet as Americans we seem too stubborn or prideful to even consider that this could be the case.
Historically European countries were far more open to other civilizations and cultures than vice versa. In response to the 1793 Macartney mission to China, the Qianlong Emperor famously wrote to King George III that he "set no value on objects strange or ingenious, and [had] no use for your country's manufactures", a rejection of the United Kingdom's desire for greater exchange between the two nations that presaged the Qing dynasty's eventual decline and collapse.
Sadly, the situation seems to have reversed. The average American today knows far less about China than does the average Chinese about America, a fact emphasized in Kishore Mahbubani's recent book Has China Won. Prior to the pandemic in 2020, there were roughly 370,000 Chinese students studying in the US compared to around 12,000 American students studying in China. On a per capita basis there were about 7.2 times as many Chinese studying in the United States as the reverse. People in China have gained far more exposure to the history and culture of America in recent decades than the other way around.
As I've observed events over the past decade or so, I've become increasingly convinced that the mindset of most Americans towards China eerily parallels the mindset of the woke in the United States towards supposed systemic racism and white supremacy. Author Martin Jacques compared the West's increasing suspicion of all things Chinese to the Qing dynasty's close mindedness to Western overtures in the late 18th and early 19th centuries. The latter suffered the humiliation of two Opium Wars and a defeat against the Japanese prior to its collapse in 1912.
One of the most frustrating things is that so many Americans just can't seem to get over the fact that China is a big, bad authoritarian country ruled by the big, bad CCP and that therefore it must be the devil and on the wrong side of history. America good, China bad. Or as the more enlightened might argue, America okay, China worse. The irony is that American antagonism towards China today eerily mirrors Chinese antagonism towards the West in past centuries. As the famous saying goes, those who don't know history are doomed to repeat it. I pray that as Americans that adage doesn't describe us.