Jul 16, 2019

Thiel's Google charge opens new line of attack on tech

Peter Thiel. Photo: Alex Wong/Getty Images

Investor Peter Thiel's charge Sunday that Google is in bed with China apparently wasn't a one-off attack. It's increasingly looking like the first shot on a new front in the war between Trump's Washington and Silicon Valley.

Why it matters: Tech companies are already defending themselves against charges of privacy invasion, political bias and monopoly power. Now, they're being accused of being unpatriotic — and even treasonous.

Driving the news: Tuesday morning, President Trump tweeted that his administration will "take a look" at Thiel's claims.

  • Thiel, a billionaire who now sits on Facebook's board and who is Silicon Valley's highest-profile Trump supporter, appeared Monday on Fox News' Tucker Carlson Tonight to expand on charges — including "seemingly treasonous" behavior — that he first leveled during a conservative conclave Sunday.
  • He asked: "How many foreign intelligence agencies have infiltrated Google? Have the Chinese, in particular, infiltrated? And why are you working with Communist China and not the U.S.?" He also called on the FBI and CIA to investigate Google.
  • Joe Lonsdale, a co-founder with Thiel of Palantir, called Google "not patriotic" in a CNBC appearance Monday.

Yes, but: Neither Thiel nor anyone else has backed up these charges with evidence, and Google denies them.

  • By raising the issues as questions, the accusers get to spread suspicions without being accountable.

The big picture: Thiel threw his bombshell only days after Trump gathered conservative social media stars at the White House to gripe about tech-platform "censorship" — and just ahead of another round of congressional hearings on Big Tech.

  • A version of Thiel's questions may turn up on the notepads of GOP members of Congress at those hearings.

Between the lines: Thiel claims that "Google is working with Communist China, but not with the U.S. military, on its breakthrough AI technology."

  • But Google pulled its search service out of China in 2010 rather than submit to censorship. That’s in contrast to Microsoft, which operates a search engine in China subject to government censorship, and other Big Tech companies that do business in China, including Apple.
  • More recently, Google has explored ways of returning to the giant Chinese market and has prototyped a version of its search engine that would be compatible with Chinese censorship.
  • Last year, Google withdrew from an AI contract with the U.S. military after worker protests.

Threat level: China is widely believed to engage in extensive intellectual property theft, and Lonsdale claimed that Google's open, "academic" culture leaves it easy prey to China.

  • Under Thiel and Lonsdale's argument, every Chinese citizen is essentially a government spy. "In working in China, you have to work for the government. Everything in China is the government," Lonsdale told CNBC.
  • But China's influence strategy is less about infiltration and more a matter of working the free market system in its favor, says Robert Spalding, a Hudson Institute senior fellow and former senior director for strategy to President Trump.

What they're saying: Inside Google, sources tell Axios, Thiel’s accusations were met with little concern over their merits — and with renewed annoyance toward an already disliked figure within the company.

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