He was the first investor in Facebook and one of the most important conservative voices on the group’s board of directors: With his departure from Meta, Peter Thiel is increasingly saying goodbye to Silicon Valley. Now the financially strong libertarian is concentrating on politics.
Tech investor Peter Thiel speaking to members of the Republican Party in July 2016.
Peter Thiel can’t stand it anymore in Silicon Valley. The entrepreneur and investor will no longer stand for office at the next election of the Meta board of directors in May. The company announced this on Monday announced. The Facebook group loses one of the most important conservative votes on the board of directors and its first external investor.
The departure comes as a surprise, but Thiel has recently made increasingly negative comments about Silicon Valley. “The heads have switched to the same. One says what the other says, so as not to offend, »said Thiel in an interview with the NZZ. This dynamic also plays a role in the business sector. And: “[Das] Silicon Valley is now more of a fashion than an opportunity.”
So it was high time for Thiel to escape the orbit of Silicon Valley. He recently moved to Los Angeles. Thiel is actually a Silicon Valley veteran. In 1998 he co-founded the payment service provider Paypal in Palo Alto and temporarily served as its CEO. After PayPal went public and then sold the company to Ebay, Thiel became a millionaire. He used the money to invest in other Silicon Valley startups, including Facebook. Thiel gave Facebook founder Mark Zuckerberg a half-million dollar loan in 2005. He later converted this into shares and thus owned around 7 percent of the company. After Facebook’s IPO, Thiel gradually sold his shares in the company, earning over a billion dollars.
A libertarian heavyweight
According to reports from the American media, which are based on unnamed sources, Thiel now wants to focus more on politics. The first thing he is supposed to do is focus on the midterm congressional elections in November. For years he has supported the Republican Party, particularly candidates who support Donald Trump’s agenda.
As president, Trump acted “far too little disruptively” for his taste, Thiel told the NZZ about three years ago, but emphasized that he fundamentally supports Trump’s policies. In particular, he credited the then-president with trying to stimulate economic growth through deregulation and tax cuts, and for pushing the line on what can be said in public.
Thiel is now concentrating more on politics, he throws his weight – and his fortune of an estimated 2.6 billion dollars – not primarily for conservatism, but for libertarian ideas. He is against taxes and regulations on principle, even if they are intended to protect competition. “Anyone who wants to be successful as a digital platform must strive for a position similar to a monopoly,” said Thiel to the NZZ. And: As a libertarian, he has more reservations about laws regulating tech than about monopolies that “spontaneously arise on the market”.
Next Thiel wrote in one blog entry from 2009: “I no longer believe that freedom and democracy are compatible.”
Conflicts of interest downplayed
Such statements make Thiel an outsider in democratic California and in the liberal-progressive tech scene. In his role as Meta’s board of directors, he also drew criticism for investing in several companies that competed with Meta or even harmed Meta directly. Thiel’s investment company Founders Fund owns shares in the IT company Boldend, which according to research the “New York Times”, Whatsapp can hack – i.e. weakens the privacy of a meta-platform.
There are also investments in Clearview AI, a startup that analyzed millions of photos from social networks, including Facebook, to train a facial recognition algorithm. Clearview AI’s actions were abusive under Facebook’s Terms of Service and sparked outraged headlines around the world two years ago.
The investments in these controversial activities give the impression that Thiel does not shy away from confrontation, but is happy to make money on both sides of the dispute: as an investor in Boldend and Clearview AI, and at the same time as a member of the Meta board. Thiel himself downplays the allegations. Conflicts of interest are overrated said in Donald Trump’s election campaign, in which he assisted the future president as a tech advisor. Rather, what some see as a conflict of interest shows that a person is committed and actually understands their field, said Thiel.
Politically balanced governing body?
With Thiel’s departure from the Meta Board of Directors, these contradictions will probably be resolved from May. However, with Thiel, a conservative voice is also disappearing from the group’s management team. Thiel was previously considered a balance for liberal and progressive representatives on the meta-board of directors. Since the platforms Facebook and Instagram see themselves as politically balanced, they have to provide a diverse board of directors in order not to lose further credibility.
Thiel’s departure hit Meta in the middle of a crisis: Since the group had to announce last week that the company’s apps and social networks were losing users for the first time since the company was founded, the stock price has fallen by almost 30 percent. A quick recovery is not in sight.