Technology investor Chamath Palihapitiya is very bullish on tech companies that can capitalize on the rise of artificial intelligence, like Google and Box — but they must keep personal information safe, or regulators will have to come in and do it for them, told CNBC’s “Closing Bell” on Monday.
Palihapitiya said that a handful of private companies have the same level of information about people as government agencies like the IRS. Once people “internalize” that, he said, the same level of regulation might apply to tech companies and government agencies.
“It’s an enormous threat — when someone gives you free software, or free in general, you have to ask yourself, am I the customer? A customer has rights,” Palihapitiya said.
Former Facebook employee Palihapitiya made the comments as his former employer has dealt with backlash over its data protection. Some of Facebook’s critics, including Apple CEO Tim Cook, have homed in on Facebook’s business model, saying it makes the customers the product.
Palihapitiya said he spoke with Facebook chief operating officer Sheryl Sandberg over the weekend.
“I think these guys are doing the right thing,” Palihapitiya of Facebook’s work on privacy. While figuring out how to protect data is “super hard” and “nuanced,” he said he’s confident that the company will figure it out.
In fact, he said he disagrees with legendary investor Jeffrey Gundlach, who said on Monday that he’d bet against Facebook in the market.
“We can agree to disagree,” Palihapitiya said, citing Facebook’s “vibrant revenue growth.”
Palihapitiya has been outspoken on new technologies and investment opportunities like artificial intelligence and blockchain. Earlier Monday, the Social Capital CEO said Box is his pick from his portfolio, based on the company’s position to support artificial intelligence applications.
Palihapitiya said that Box is really one of a handful of companies that makes a good artificial intelligence investment, as it has big contracts and high retention rates compared to consumer-facing competitor Dropbox.
But he also cautioned that while artificial intelligence could become a huge market, it could also destroy the market value, and potentially jobs, at legacy businesses.
“I think that’s where we have a different type of conversation …. to be more humane,” he said.
