Understanding the Thiel/Musk view on China

Letters from O'Brien #76

Dear Mr Smith,

With the war in Ukraine potentially coming to an end (let’s hope Zelenskyy’s performance in the White House hasn’t put the whole thing on the back foot!), there is a veneer of global peace on the horizon. Yet I fear the world may become embroiled in heightened conflict with China. Why is that? Part of the problem, I believe, is that the current administration in Washington is heavily staffed by Thiel allies.

I want to briefly write to you today about the ‘techno rights’ view on China, and why it is crucial to understand when viewing Trump and (more precisely) Vance’s statements on the region. I’m probably not going to be able to unpack it all in this one letter, so I’ll write this as a short overview which may be a helpful foundation for future analysis/letters.

TECH RIGHT VS NEOLIBERALS

Let’s start with the basics; the current administration is made up of characters who exist in the strange overlap between the Israel lobby (who may have pivoted conservative after Oct 7), and the so-called ‘Little Tech’ right.

I would say that the Israel lobby is actually the lesser of the two factions in terms of tangible sway right now, although I do not believe the two groups really have a conflict of interest. Prominent players within the Little Tech sphere include Sam Altman of OpenAI, Palmer Lucky of Anduril, Alex Karp and Jacob Helberg of Palantir, Elon Musk, and of course Thiel who bankrolls or has been directly involved in practically all of these projects.

Outside of ‘the industry’, there are many influential figures who are supporters of this little tech right, including Ben Shapiro, Vivek Ramaschwamy, Tucker Carlson, Yoram Hazoni and so forth. Most of these powerful influencers (save perhaps for Carlson, who is a wildcard) are connected to NatCon, a think tank and summit which pushes a modernised, softcore form of neoconservatism focusing on ideas of ‘multicultural meritocracy’. From the NatCon crowd come many smaller ‘next generation’ influencers artificially aimed at younger people, and all pushing roughly the same softcore neoconservative Straussian worldview; Douglas Murray, Eva Vlaadingerbroek, Jack Posobiec, etc.

What is important to understand is that everyone in this sphere is connected in some way to one another, usually with a direct connection to Thiel. For example, Jacob Helberg is married to Keith Rabois, an early investor in the Thiel/Musk PayPal project, and a friend of Thiel from their time as students at Stanford University.

I guess technically this connection goes back further than Peter Thiel himself, not to lay it all on him. For example, in college Thiel was initially discovered and bankrolled (along with Hazoni) by Irving and William Kristol, who themselves were first generation students of Leo Strauss, himself a student of Ze’ev Jabotinsky. Other first generation Straussians include Paul Wolfowitz - who helped re escalate the Cold War under Reagan and later formulate the Wolfowitz policy - and Harry Jaffa - who founded the Claremont Institute, which produced Ben Shapiro. The first generation Straussians came up with a name for their new movement when it first emerged; the ‘Neo Conservatives’.

In essence, these NeoCons and NatCon aligned actors are increasingly at odds with another powerful sphere in Washington; those being the Neoliberals. This faction was long differentiated from the neocons but in practice I think they were quite similar up until recently; the neoliberals explicitly supported the Wolfowitz policy (the deliberate provocation and escalation with post-Soviet Russia to create artificial conflict), and they also support a sort of patriotic militarism, albeit one in which the NATO-sphere stands to defend liberal positions rather than western civilisation. I would say that the standout examples of neoliberalism in practice include the Balkan wars in the 1990s (most prominently the Kosovo war and Kosovo itself), the artificial manipulation in Georgia in 2008, and the Ukraine War. This neoliberal faction held a lot of power from the early 1990s through until the Biden administration. The Neoliberal movement has now lost much sway in America but does hold significant power in Europe.

GENERAL VIEWS

Jacob Helberg - Karp’s second in command at Thiel Palantir firm - also happens to be on the US-China Economic and Security Review Commission.

Many of these figures only pivoted to the Trump-aligned right after October 7^th, over fears of rising antisemitism on the liberal left. However, in the same manner, they also opposed the traditional MAGA right. Helberg - for example - was one of many on the tech-right to lobby for TikTok to be banned or constrained following the apparent ‘rise of antisemitic content’ following the start of Israels Gaza campaign. Likewise, Palantir’s Alex Karp visited Israel voicing his concerns over growing antisemitism, yet also proudly boasted about how Palantir’s AI-driven software helped prevent the rise of the right wing in Europe.

This whole sphere is also primarily interested in AI. Thiel has long been a fan of a type of monarchy (or something to that extent), trashing a democratic system in favour of a perfected AI method of governance. Many of them believe the end goal for America is to produce an AI super-intelligence that will self-propagate. This goal heavily influences the geopolitical worldview of this sphere; they believe that whoever wins the AI ‘Cold War’ will be unstoppable, due to the power afforded to the nation possessing this self-propagating AI super-intelligence.

No one in this sphere is ideologically ‘conservative’, they just happen to be oppositional to the Democrats/Liberals due to their anti-Israel pro-Palestine stance. Most of these guys actually have quite liberal worldviews but believe that the current conservative movement is instrumental in forwarding these interests in the tech industry.

Musk - who is connected to this sphere but ideologically more free-floating - is a bit harder to discern. His primary concern appears to be AI, as well as advancing the interests of Tesla. This requires lithium and other rare earth elements. I believe this is why Javier Milei was artificially pushed by Twitter; Milei was a pawn to swing parts of South America away from Chinas sway (almost all left leaning governments there are pro-China) and back into the American sphere. I think Musk’s personal business ambitions are also backed by the intelligence apparatus, since Musk’s interests necessarily converge with the ‘New Monroe Doctrine’ in South America. In other words, I do not believe Musk is ‘in control’ as some claim, but that his interests align with the geopolitical interests of America, hence why figures like Tucker Carlson will platform these plants like Milei.

Lastly - as I will discuss next - this group are somewhat distinct from the old NeoCons, in that they do not align with the Wolfowitz policy on Russia. Instead - as has been made evident with their opposition to the neoliberal agenda - they believe that Russia is a natural ally of Europe and should be reintegrated into the Euro-sphere. They believe that the geo-strategic method of isolating Russia has pushed it to make unnatural alliances in the East, such as with China, North Korea, and the anti-western Middle Eastern factions. The result has not been an effective encirclement of Russia but has instead empowered it as China’s manufacturing power and internal economy has grown. Thus, their logic of reintegrating Russia by counter-signalling the Wolfowitz doctrine has the effect of pulling them away from Chinas sway. I actually agree with them on this, and in this manner, I support their ambitions to normalise relations with Russia.

In other words, the tech-right seems primarily concerned with riding a fine line between left and right policy. Their primary issues are stopping the rise of what they deem antisemitic content from the left and right alike, advancing Silicon Valley’s interests in Washington, and winning the new Cold War with China, which just happens to boil down to them and their AI firms producing ever more expensive and advanced models.

VIEWS ON CHINA

Now to the main issue; conflict with China. Realistically this will be the defining issue of our time if not addressed; a war with China would be catastrophic. Relatively speaking, they are considerably more powerful than Japan was in 1941— defeating Japan was hell, so one can only imagine how much harder a war with China would be.

The game plan I see being formulated in the upper echelons of Washington is essentially to isolate China using tariffs and embargoes of some sort. The tariffs thing I support, since the goal is to reinvigorate domestic industry. However, to overextend beyond this into the realm of an actual trade-war without any domestic benefit is stupid.

I may have written to you before regarding this, but the idea of ‘Chinese containment’ will not work today. It simply cannot, because the US mathematically cannot outcompete China at its own game. China has a lower standard of living, lower minimum wage, more people, existing infrastructure, and thus can always outcompete the US - and the world for that matter - at the manufacturing game. Tariffs help America but I do not think it will result in China’s domestic economy collapsing. I think they will just pivot, either inwardly or to its growing list of partners. Most major countries on earth are in some way connected to Chinas One Belt One Road initiative, and this guarantees an international economy for China. Since the US cannot guarantee any competition in the manufacturing space, there is no real way to coerce the Belt and Road initiative nations to swing back into the western sphere.

In other words, the only way ‘Chinese containment’ would result in a Chinese defeat and the continuation of unchallenged American global power is if there was an actual war. Theres two problem; firstly, no normal person wants war, and secondly, there is no guarantee that America could even win a war with China, even if all of its current allies joined in against the Chinese and their own coalition.

The reason Russia must necessarily be reintegrated in some capacity with Europe is because the balance of power is no longer so clearly in favour of the western sphere. Back during the early days of the Cold War, this power balance was completely different; America reigned supreme. China during its ‘warlord period’ was nothing more than fractured third-world militia factions, completely decimated by the Japanese. After the 1949 victory, they were still technologically in the third world. The Soviets were much more capable, but America still held some slight advantages.

Today this is not clearly the case; Russia has largely recovered from its post-Soviet depression, China is the most powerful manufacturing hub on earth, and Western Europe is in ruins on so many fronts. In fact, in this new Cold War, western Europe has already technically lost; Germany and the Low Countries have been dominated by America cutting off their power supply from Russia, whilst France has lost out to Russia in Africa, with places like Niger (who provide most all of the uranium needed for Frances majority-nuclear power infrastructure) and other regional nations all crumbling under Wagner-led coups.

England - who hasn’t suffered a major geopolitical defeat as yet – is, I believe, already out of the fight, on account of their absolute inability to field a properly functioning military, fractured society and multiple internal haemorrhages on the social/political front.

I believe these tech-right guys rightly perceive that Western Europe is no longer the reliably powerful wall against the East that it once was. Militarily it is a disaster on all fronts; on the ground there is a stark contrast between enlistment in Western Europe and Russia/China. The Army’s equipment (in places like Germany and the UK) is mostly outdated or lacking upkeep. In terms of naval power, it is a similar story; one report stated that every submarine in Royal Navy service is leaking in some capacity (aka, cannot dive to proper depth) whilst all of Europe’s warship capacity is lacking in comparison to China. In the air it is once again sobering; Europe ‘relies’ on a few native designs made possible only by the assistance of America (through General Electric), all of which are supposedly outmatched by the 50-something year old F-15 and Russian Flanker, whilst the backbone of these air forces is American tech— the F-35 sold domestically, or actual American air power at Rammstein Air Base.

In other words, when push comes to shove, Europe is not a power with self-determination… sadly. Russia is one of the only exceptions; it has good manufacturing capabilities in terms of artillery, tanks, APCs, and so forth, not to mention their proven aircraft, missiles, and rockets.

Thinking about this logically, I would guess that the tech-right sphere sees the situation as thus; America is the power-source (in some cases literally) to Western and Central Europe. Europe is thus a staging ground for tech originating from the US, not an actual self-propagating, self-sufficient military hub. The two other major sources of pure military power are Russia and China. Maybe in the future Turkey will jump in, but if it does it will not be solely aligned with the west. Russia does not pose the technological manufacturing threat (read; artificial intelligence and semiconductors) that China does, but it does have a strong and self-sufficient military.

In summary, the tech-right correctly observe that the real rival to global US power is China. However, I do not believe that we can ‘win’ against China using sheer force; they arguably have more ‘sheer force’ to offer then we do, and what’s more important to note is that they are winning on the global front because they offer other nations tangible outcomes; goods, manufacturing, etc. We offer services, which are profitable but in the long run are not actually tangible in projecting power, securing borders, or building nations.

The only way I can imagine America ‘winning’ in any real sense is by not directly attempting to defeat China. Instead - as I have said many times - the answer is to revive domestic manufacturing through the reallocation of government funding, the lowering of interest rates and taxes, and the application of harsh tariffs to bring foreign goods to parity with western goods. Give it enough time, and the dollar regains value, goods become both cheaper domestically and more valuable internationally, the standard of living goes up, and America begins to ‘win’. It wins not because it defeats China through abstract policy, but because it reinvigorates the lives of its citizens.

CONCLUSION

I am still not sure where the balance is struck between legitimate obsession over this ‘AI super-intelligence’, and securing incredibly profitable deals for these Silicon Valley firms by lobbying in Washington. From reading some of the intellectuals associated with the movement, such as Yarvin, I am convinced that they believe what they are saying.

Compared to the neoliberals, we are yet to see the outcomes of this new faction. In some ways I am obviously oppositional to their policies (suppressing free speech because of claimed ‘antisemitism’, supporting H1B to staff the tech industry, potential war with China), while in other ways I believe their general sentiment is slightly better than what we previously had, especially given their willingness to finally put an end to the artificial conflict in Europe (again, let’s hope Zelenskyy hasn’t thrown a temporary spanner in the works for an immediate peace deal).

What I fear the most from this faction is actual war with China (or worse the China-Russia bloc). As time goes on, there is no longer a guarantee that America would even be able to win; back in the day it was already going to be a challenge like the Pacific War, whereas now I think it may actually be a world-ending conflict if begun.

Sincerely Yours,

O’Brien