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Why this former Facebook exec turned investor dumped all his stock and bought Amazon instead

Chamath Palihapitiya speaking at a Sohn conference in New York.
David A. Grogan | CNBC
Chamath Palihapitiya speaking at a Sohn conference in New York.

Chamath Palihapitiya, the former Facebook executive turned technology investor, is going all-in on Amazon and Alphabet. But he's bearish on Apple, for the time being.

Palihapitiya said Amazon is the most important company on the planet, so much so that he dumped all of his Facebook stock and moved it into the e-commerce giant. He's stated in the past that Amazon will reach a $3 trillion valuation in 10 years.

"There's a handful of exceptionally good companies but there's always one company that's the best," Palihapitiya said on Wednesday at the CB Insights Innovation Summit in Santa Barbara, California. "It does something that is just so fundamentally utilitarian and does it incrementally better everyday."

Palihapitiya started his firm Social Capital in 2011, and has rapidly become a force in Silicon Valley, known for prescient investments in start-ups and for developing a broader strategy that also backs public companies. He recently even launched a hedge fund. He's also not shy about speaking his mind.

Alphabet is Palihapitiya's second favorite company for reasons that go way beyond search and mobile. Rather, he's bullish on Google's Tensor Processing Units, or TPUs, which are processors built for machine learning. In short, they're pushing computing farther and faster on less silicon, and Palihapitiya sees Google as the way the world will get to artificial intelligence at scale.

"They're an order of magnitude ahead," he said.

With regards to Apple, Palihapitiya said the company is going down the path of Microsoft. Apple CEO Tim Cook, like former Microsoft CEO Steve Ballmer, succeeded an iconic founder who'd built one of the world's great franchises and has thus been hampered by "the legacy of that person."

Palihapitiya said he's not an Apple shareholder now and doesn't expect to be in the near future. But eventually, the company will get a leader further removed from founder Steve Jobs and less afraid of taking risks, similar to the approach Satya Nadella has taken since assuming the top job at Microsoft.

"At some point Apple will become much more aggressive and much more daring in taking their brand and capital to really reshaping markets," he said.

In the meantime, he's baffled as to why Cook hasn't spent some of the company's more than $200 billion in cash to purchase Tesla, Netflix or Spotify.