Chamath Palihapitya is the founder, chairman, and CEO of Social Capital, a Venture Capital firm bases in Palo Alto, California. Chamath began his career as an early executive at AOL, Mayfield Funds, and subsquently Facebook wherefore he accrued his first fortune. Chamath is notably referred to as the Warren Buffett of tech investing due to his firm's exclusive allocation within emerging internet technology startups, and its staggering 29 % average annual returns.
Recently, Palihapitya stated in an interview in a CNBC interview with Andrew Ross Sorkin that he expects new taxes, regulation, and anti-trust laws at every level of government to eventually relegate FANG companies to more modest valuations. He then added that competition from industry disruptors and innovators may increase this burden, especially with the president already contemplating the ratification of an executive order characterizing Alphabet as a monopoly in violation of Sherman Anti-trust laws. The greater competition in addition to increased taxes and regulation will hobble 'big tech' as a result in the coming years according to Palihapitya, it is only a matter of time. “Big Tech’s long term success is no longer about better products,” Palihapitiya said in a Friday tweet. “They are incumbents and their success is now a multi-variate/multi-dimensional problem of competition, anti-trust, tax and regulatory multiplied by EVERY city, state, country and jurisdiction in which the operate.”
Palihipitya's conviction that government is intimidated by 'big tech' is not untrue as the House Judiciary Committee launched an anti-trust investigation June 2019, whose findings were indecisive, later prompting a renewl of the probe and hearings this year by the Senate GOP and House Democrats alike. Additionally, shortly proceeding the hearings as expounded upon previously, the president passed an executive order authorizing an investigation regarding whether Google exists in violation of Sherman Anti-trust law. Finally and most importantly, states like Massachusetts, Connecticut, New York, and California are taxing streaming service membership fees and search engine AdSense revenue at increasingly ever higher rates. We cannot refute Palihapitya's logic as evidenced by current events which only act to further vindicate his prediction, with each new hostility and encroachment by Washington against Silicon Valley.
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