Thiel finds weak monopoly stories in AI pitches

Transcript

From the transcript The Builders with Walter Isaacson publishes with the episode.

1. 10:16

   Quick, before you go on, you said, unless it's captured by a few companies, are you worried that indeed we're about to have four or five companies capture it?

2. 10:28

   It's certainly, yeah, and certainly there's a history where most of the history of tech innovation, I would say for 200, 250 years, relatively small parts of the innovation were captured by business. They mostly went to consumers, to workers, to the rest of the economy. there are ways that software and the internet were somewhat of an exception. And so we had these enormously successful businesses. Maybe they were natural monopolies of sorts. They were in some sense good for consumers, but also extremely profitable. And so there's a pattern matching to what happened with the internet that I think people quite reasonably are worried about will happen with AI, that it'll be And maybe it's an even bigger market. It's a bigger technology. And so perhaps.

3. 11:20

   So you would try to stop that. In other words, our antitrust laws. Well, the question is, is that how likely do you think that's going to happen? The intuition that I have on the other side is that one of the questions I always like asking companies is, tell me why you have a monopoly. Because monopolies, we can sort of debate whether they're good or bad for society. Obviously, we have IP. We have all kinds of good forms of monopoly. But on the inside, yeah, you don't want to have just cutthroat competition where all the profits get competed away. And the kind of narratives people tell me when they pitch me on AI companies, they're narratives of growth, of terrific technology.

4. 12:00

   They are incredibly weak on the monopoly story. And then the felt sense of it is that it's like this incredibly fast, dynamic race where it's been changing a lot. DeepMind, in a sense, was in the lead in the early 2010s. You know, then OpenAI with chat GPT and the transformer models was able to replace that. And then in some ways, you know, Altman locked up a lot of the chips and built the data centers preemptively. So there were sort of all sorts of ways he correctly leaned into this incredibly CapEx intensive strategy. And then there still is a sense where, you know, maybe Anthropic is a little bit more in the pole position now than OpenAI was. And it's always hard to exactly score these things, but I would say that it also still feels that Google and Meta and Grok are not that far behind. I'm not

5. 12:54

   sure China is that far behind. Or if we describe it on the level of the Shakespearean drama among these people, it's like really crazy. So they're acting like, man, it is a fight to the death. It is the furthest thing from monopoly imaginable. And if it's not a monopoly, that's where I think the benefits will be likely distributed pretty widely in society. Now, if I had to steel man the anxiety, which was your starting question, you could have a lot of growth and the median person could be better off. But if it's with a lot of volatility, you know, you expect to get a 3% wage hike, but it's plus or minus 10% or something like that.

6. 13:34

   And we're kind of in this society that doesn't really like risk, doesn't like that sort of volatility. It doesn't like disruption. So, yes, it may be good for the median person. The good may be sort of unknown. The bad things are more predictable and the disruption is clearer. So I think even on the economic level, I can understand the anxiety even though I think it is misguided.