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Peter Thiel Says, Forget the Hype: Big Tech Is Slowing Down

Second Contrarian Idea: We can see the slowdown clearly if we look past the hype

Philosopher of technology George Gilder revisits world class tech venture capitalist Peter Thiel’s live streamed talk at COSM 2019 in “ The failures and self-hatred of Big Tech.”

Peter Thiel

Ih the first part, Thiel noted that the way Big Tech operates today has more in common with a communist state than with a democracy. His First Contrarian Idea, set out there, is that decentralization is coming. In this part, he talks about his Second Contrarian Idea: If you look at the big picture over the past few years, Big Tech’s progress is slowing.

Thiel, the author of Zero to One (2014) will attend COSM 2021 (November 10–12) in person this time, along with Gilder. Note: You can get the best rate if you register before October 31. The focus of the 2021 meet will be the paradoxes of the new world of technology and, as we will see, Thiel is an expert at delineating them.

This is the second of a four-part series, examining his thesis:

This portion begins at 06:10 min. A partial transcript and notes, along with Show Notes and Additional Resources, follow.

Peter Thiel: Now, the second contrarian idea that, is of course, we can talk about how fast these things are happening in technology generally. We live in a world of incredible scientific and technical precision; we can measure Avogadro’s number, or the fine-structure constants of physics. But when we talk about the nature of the progress of science and technology, and how fast science and technology are progressing, we do this in the most qualitative way, with incredibly little precision.

Are we accelerating, in scientific and technical fields? Are we, progressing, but at a slower pace? We tend to only get these fairly vague answers.

The consensus, in both Silicon valley and an academic context, is that we are doing great and everything is just moving super fast. It’s all these forms of accelerationism, and we can debate whether Kurzweil’s the Singularity is near. All you need to do is sit back, eat some popcorn and watch the movie of the future unfold.

Or perhaps it is dystopian, á la all the science fiction movies from Hollywood. The robots are going to kill you, or you’re going to be in this Matrix. But we’re accelerating to utopia — or accelerating to dystopia.

The somewhat contrarian thesis I have on this is that perhaps the progress is not as fast as advertised … things have been slower. And they’ve been slower for quite some time.

One cut on this is always to differentiate between the world of atoms and of bits.

Since the 1970s, we’ve had a narrow cone of progress around atoms. Around bits — computers, internet, mobile internet, software — these have been advancing fairly quickly. The world of atoms, somewhat more slowly.

When I was an undergraduate at Stanford, in the late eighties, I would say that almost every engineering field, in retrospect, was a bad field to go into… Electrical engineering was still okay. Computer science was the really good field to go into in the late Eighties. All the other engineering fields, it was just regulated to death.

There wasn’t that much you could do in the world of atoms, and it turned out that we had a lot of slowed progress. I think that if we analyze the rate of scientific progress politically, and think of it as university professors, entrepreneurs, or venture capitalists exaggerating about how much good they’re doing and how great they are, we understand that the incentives are always to exaggerate. To say that, we’re just around the corner from curing cancer, around the corner in all these different things.

Yet, it’s been in some significant way, slower over the last 40 or 50 years. The danger is that if anything, that it’s things are slowing down even more at this point.

Note: While Thiel’s idea is contrarian, it finds support among scholars“In the new paper “Is the rate of scientific progress slowing down?” by Tyler Cowen and Ben Southwood, the two researchers conclude that ‘there is good and also wide-ranging evidence that the rate of scientific progress has indeed slowed down. In the disparate and partially independent areas of productivity growth, total factor productivity, GDP growth, patent measures, researcher productivity, crop yields, life expectancy, and Moore’s Law we have found support for this claim. … One implication here is we should not be especially optimistic about the productivity slowdown, as that notion is commonly understood, ending any time soon.’” – James Pethokoukis, AEI Ideas

Peter Thiel: The world of very fast progress in bits, is actually starting to slow down. Silicon Valley was charismatic in this because it was the one place where things were still happening, relative to the rest of the US. And it’s become a lot less charismatic in the last five years. Even as recently as 2014, this was the place where the future was being built.

In 2019, the big tech companies are probably as self hating in some ways as the big banks were in 2009. There’s a sense that it’s not quite working.

The Google propaganda of the future was, of course, it’s all going to be bits. It was all going to be more automation. The story in 2014 were things like Google glasses so you could identify anybody you looked at, at any time. It was the self-driving car. I would say these aren’t that big a step of innovations. Probably, a self-driving car is a step from a car, but not as big as a car was, from a horse.

So you can debate quite how big these things are, and how to quantify them again. But, that was still the narrative that was very intact in 2014, and when you fast forward to 2019, it’s striking how there’s absolutely no narrative of the future left. Google doesn’t even talk about the self-driving car very much. There’s a sense that it may still happen, but it’s further in the future. The expected time seems to be getting further away, every passing year.

Note: One issue for self-driving cars is getting past the problem of the many things machine vision can’t “know”: Machine vision may mistake an overturned school bus for a snow plow, for example, because there’s nobody “in there” that would recognize the significance of the difference.

Peter Thiel: One of the ways this stagnation thesis was embedded in the language is that the word technology had a very different meaning in the 1960s. It meant not just computers, but also rockets, supersonic aviation, underwater cities, the green revolution, agriculture and biotechnology, new medicines and all these things — because all these things were progressing on many fronts.

Today, if you use the word technology, it is often synonymous with information technology, and probably just the software internet part of that. That’s the only part that has been progressing in recent decades. The danger is that even that has slowed down a lot somehow.

Silicon Valley has consolidated into some larger companies and it’s gotten harder for new companies to break through. It’s gotten harder because new companies, or small companies are good at doing new things, and people are doing fewer new things. Then, the big companies are more dominant.

So, I think the second cut, on the Life after Google book is: Gilder is always super optimistic, but there is a small undercurrent of pessimism to the book. The undercurrent is, the specter that haunts Life After Google: Maybe this current regime is going to go on for a really long time. There was life after television, but, but life after Google may take a little bit longer. There is a danger, that we’re in this somewhat slowed, somewhat stagnant world. So, that’s the second idea that I think we need to always grapple with a lot: Maybe, we’re in this world of tech stagnation.

And the third contrarian idea? In tech, the pendulum will swing back slowly toward more decentralization.

Here are the Three Contrarian Ideas, with transcript and notes:

  1. Peter Thiel: Big Tech, as it operates today, is communist. Visions of the computer age have swung from big centralization in 1969 through big decentralization in 1999. Neither got it quite right, Thiel says. The coming decentralization is the First of three Contrarian Ideas that the famed venture capitalist offers tech philosopher George Gilder.
  2. Peter Thiel says, forget the hype: Big Tech is slowing down. Second Contrarian Idea: We can see the slowdown clearly if we look past the hype. Thiel: A self-driving car is a step up from a car but not as big as a car was from a horse. And Google doesn’t even talk about the self-driving car much now.
  3. Top venture capitalist on tackling the big, corrupt universities. Peter Thiel: Online education is great for learning, but unfortunately, learning has almost nothing to do with the so-called educational system. Thiel’s Third Contrarian Idea: Never bet against the human spirit as a source of new ideas. That includes education reform.

And in the fourth and final episode: Is Bitcoin just a flash in the pan? Peter Thiel responds. He reveals that PayPal started out as a libertarian project to free money from central control but that proved harder than anticipated. Thiel thinks of BitCoin as the real thing: “It’s sort of the centralized currency that we fantasized about at PayPal, but didn’t quite build.”

You may also wish to read: Peter Thiel speaking in person at COSM, Seattle, November 10. As a world class venture capitalist, he is known for bluntness about what works and what doesn’t. COSM 2021 focuses on the converging technologies, remaking our world. Thiel asks, is new tech soaring or slumping?


What does super-investor Peter Thiel think you should read?
Some books to consider include history as well as business strategy. The two cannot be separated. A book maven tells us what Thiel has recommended, if you are thinking of starting a business — or thinking about life in general.

Show Notes

  • 00:50 | Introducing Peter Thiel
  • 01:12 | Three Contrarian Ideas
  • 01:50 | The History of the Future
  • 04:53 | The First Contrarian Idea: AI is Communist
  • 06:10 | The Second Contrarian Idea: The Speed of Technology
  • 13:20 | The Third Contrarian Idea: Technology is about People
  • 14:55 | Bet on the Human Spirit
  • 15:22 | The Big Tech Monopoly
  • 19:18 | Improved Education
  • 27:21 | The Monopoly of Money
  • 32:24 | China’s Capabilities
  • 35:15 | Technology and the Human Condition

Additional Resources

  • COSM 2021: November 10-12 in Bellevue, WA 
  • Watch Peter Thiel’s talk on YouTube.

Podcast Transcript Download

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Peter Thiel Says, Forget the Hype: Big Tech Is Slowing Down