Peter Thiel

Cofounder of PayPal

• Born: October 11, 1967
• Place of Birth: Frankfurt, Germany

Primary Company/Organization: Palantir Technologies

Introduction

Peter Thiel is an investor, hedge-fund manager, and entrepreneur who cofounded PayPal with Max Levchin. He was the first outside investor in Facebook and has a lengthy record of supporting successful internet innovators. In 2004, he cofounded the software and services company Palantir Technologies. He has used his substantial personal wealth to fund a range of projects, through the Thiel Foundation and other vehicles, in line with his scientific and libertarian interests. In doing so, he has established a reputation as a leading philanthropist in venture capitalism. These efforts are in part an attempt to prevent what he believes to be a coming catastrophe by developing necessary preventive technology.

Early Life

Peter Andreas Thiel was born in Frankfurt, Germany, on October 11, 1967. He moved as a small child with his younger brother and parents to California after several other stops due to his father's career as a chemical engineer. Thiel became an excellent chess player and achieved the rank of master. He attended Stanford University and received a bachelor's degree in philosophy. He helped found the Stanford Review, which has become a well-known forum for right-wing views on society and politics.

Thiel offers substantial fellowships of $100,000 each to college students to drop out of college for two years to become full-time entrepreneurs. The award reflects his skepticism about the value of formal education. Like-minded friends whom he met at Stanford went on to form the so-called PayPal Mafia. After graduation, Thiel worked in the legal profession and then joined Credit Suisse and traded derivatives for three years before starting his own firm, Thiel Capital Management, in 1996.

Life's Work

Thiel started PayPal with Max Levchin in 1998 as a means of transmitting cash payments via the internet safely. The company subsequently merged with Elon Musk's X.com and, for four years, struggled to survive in an unfriendly business environment, which included attempts by organized crime to hack and overtake the PayPal network and the traumatic events of the collapse of the dot-com bubble. However, the company's biggest struggle was with the online trading giant eBay, which resisted the presence of PayPal at a time when a number of payment options were competing for market share. The rapid formulation of business strategy by company leaders at this time has become a staple of business school case studies.

In 2002, eBay bought PayPal. Thiel's share made him rich. He reportedly made $55 million from the total $1.5 billion sale. Freed from corporate responsibilities, Thiel founded Clarium Capital as a vehicle for investments in a wide range of activities that suited his development interests. The company prospered in its early years. Although profits declined in the years following the financial crisis of 2008, Thiel's fortune had already become self-sustaining.

Thiel's investments were inspired by the dot-com bubble and by the philosophy of René Girard, whom he had met at Stanford, in addition to interests in innovative scientific research. Some of the investments have been angel investments and venture capitalism. The most significant example of this was the 2004 investment of $500,000 in Facebook after Thiel was introduced to founder Mark Zuckerberg. Thiel's investment provided him with more than 10 percent of the company and was the first outside investment in the social networking company, signaling to other potential investors that Facebook was a promising investment opportunity. His relationship with Facebook was restricted to the financial side, and he has shown little personal aptitude for technological innovation other than the desire to help fund and inspire it. Following Facebook's initial public offering (IPO) in May 2012, Thiel sold off most of his stake in the company. He remained on the board of directors of parent company Meta until 2022.

The billionaire has been able to establish numerous investment projects supporting long-term scientific research that may not meet the normal criteria of venture capitalism and that are better described, therefore, as philanthropic in nature. These have included funds for the Singularity Institute (now the Machine Intelligence Research Institute) and Thiel's seasteading interests. Support for antiaging technology stems from his belief that death is a phenomenon that appropriate technology could postpone indefinitely. More conventional early-stage investment has helped in the success of such internet ventures as LinkedIn, Yammer, Friendster, and Vator.

In 2004, Thiel was one of the leading investors and cofounders of a new firm, Palantir Technologies, which also received funding from the Central Intelligence Agency's investment arm. The concept of Palantir derives from experience at PayPal in the conflict with organized criminal attempts to hack or cheat the system. This gave rise to the insight that augmented human intelligence, given an appropriate data-mining environment, would outperform purely machine intelligence. The company aimed to provide such an environment and has been credited with success in fighting potential fraud associated with the Recovery Accountability and Transparency Board.

In addition to investments, Thiel is active in promoting libertarian ideas and their proponents, including presidential candidate Ron Paul. During the 2016 presidential campaigns, he backed the candidacy of Donald Trump. He also writes occasional articles for the Wall Street Journal, Forbes, and other publications; has funded films such as Thank You for Smoking (2005); and has taught at Stanford University. He once claimed that freedom and democracy are incompatible and indicated that the former was preferable to the latter. His philosophy mixes promotion of financial capitalism with the fear that various disasters threaten humanity or at least human society, which can best be tackled through technological innovation. However, he fears that the pace of technological change remains at an unsustainably low rate and is characterized more by extensive change (spread to all parts of the world by processes of globalization) than by intensive change, which involves the creation of disruptive new technologies. This requires unconventional thinking, which is compromised by social norms, the contemporary educational system, and modern life. This philosophy led Thiel to establish the Thiel fellowships, which offer up to twenty young people a total of $100,000 each to spend two years away from college and pursue entrepreneurial goals. In 2014, Thiel published the book Zero to One: Notes on Startups, or How to Build the Future with Blake Masters.

In 2016, Thiel confirmed that he had financed several lawsuits brought against Gawker Media, including one brought by former professional wrestler and television star Hulk Hogan, in which the jury awarded Hogan $140 million and caused Gawker to file for bankruptcy and cease operations. Thiel reported that he was motivated to take down Gawker Media after a 2007 article published on the website's Valleywag blog outed him as gay. “It’s less about revenge and more about specific deterrence,” he told Andrew Ross Sorkin for the New York Times (25 May 2016). “I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest.”

Thiel's politics have become increasingly important in his life, and he has made some plans for creating a “microstate” through “seasteading”—that is, building a large ship or floating platform that can declare independence as a corporate-state ruled by its shareholders; in this entity he foresees the ability to experiment with new governmental forms. He has also enthusiastically pursued technological ideas that may derive from his love of science fiction: antiaging technology, for example, as well as space exploration and nanotechnology. Despite an occasionally apocalyptic vision of the future, Thiel remains optimistic that technological advancement can be intensified, primarily through market means, to the extent necessary to fend off potential disaster.

Thiel was one of very few in Silicon Valley to express support for Trump during the 2016 presidential campaign, notably donating $1.25 million to Trump's campaign in the last weeks leading up to the election. Within a few days of Trump winning the 2016 presidential election, Thiel was named to the Presidential Transition Team Executive Committee, along with over a dozen others, led by Mike Pence. The committee was tasked with helping to investigate Trump's choices for appointees and for establishing viable policies out of campaign promises.

According to reports, Thiel had become disillusioned with Silicon Valley by 2018, claiming that the area suffered from insularity and political as well as cultural myopia. Therefore, he moved the offices of Thiel Capital as well as the Thiel Foundation to Los Angeles that year. In 2019, he was a subject of media attention once more after he made comments against tech giant Google. Speaking at the National Conservatism Conference in Washington, DC, in July, he suggested that the company should be investigated by the Federal Bureau of Investigation (FBI) and the Central Intelligence Agency (CIA) due to its links with China. He then furthered this criticism of Google in an op-ed piece published in the New York Times in August.

Thiel has become increasingly vocal in his conservative and frequently eccentric views about a myriad of topics, from the COVID-19 pandemic to the Federal Reserve. He has shared his views in writing and in speeches, such as the keynote address he gave at the National Conservatism Conference in 2021. While supporters on the right have embraced his ideas and his vision of the future, critics have faulted his views as often hypocritical and unrealistic. In 2022, Thiel backed a former employee, author J.D. Vance, in his successful bid for the US Senate. Thiel subsequently said he would no longer fund political campaigns. Trump ran for president a third time in 2024 and chose Vance as his running mate. While campaigning, Vance repeatedly encouraged Thiel to back the ticket financially.

By 2024, Thiel's net worth was estimated at $10.6 billion. Forbes included him on its 2024 Midas List: Top Tech Investors at number 12.

Personal Life

Thiel married Matt Danzeisen in 2017. They are the parents of two children.

Bibliography

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Fitzpatrick, David. The Facebook Effect: The Inside Story of the Company That Is Connecting the World. Simon, 2010.

González, Andrés Guadamuz. “PayPal: The Legal Status of C2C Payment Systems.” Computer Law and Security Review, vol. 20, no. 4, 2004, pp. 203–9.

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Peltz, James F., and David Pierson. "Peter Thiel, Retreating from Silicon Valley’s Tech Scene, Is Moving to L.A." Los Angeles Times, www.latimes.com/business/la-fi-peter-thiel-20180215-story.html. Accessed 15 Oct. 2024.

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Popper, Ben. "Peter Thiel Reelected to Facebook's Board of Directors." Verge, 20 June 2016, www.theverge.com/2016/6/20/11979738/peter-thiel-relected-to-facebooks-board-of-directors. Accessed 15 Oct. 2024.

Rahnesar, Romesh, and Peter Thiel. “21st Century Free Radical.” Bloomsberg Businessweek, 2 Feb. 2011, www.bloomberg.com/news/articles/2011-02-03/peter-thiel-21st-century-free-radical. Accessed 15 Oct. 2024.

Sacks, David O., and Peter A. Thiel. The Diversity Myth: Multiculturalism and Political Intolerance on Campus. Independent Inst., 1998.

Sorkin, Andrew Ross. "Peter Thiel, Tech Billionaire, Reveals Secret War with Gawker." The New York Times, 25 May 2016, www.nytimes.com/2016/05/26/business/dealbook/peter-thiel-tech-billionaire-reveals-secret-war-with-gawker.html. Accessed 15 Oct. 2024.

Tong, Anna, Alexandra Ulmer, and Jeffrey Dastin. "Exclusive: Peter Thiel, Republican Megadonor, Won't Fund Candidates in 2024, Sources Say." Reuters, 26 Apr. 2023, www.reuters.com/world/us/peter-thiel-republican-megadonor-wont-fund-candidates-2024-sources-2023-04-26/. Accessed 15 Oct. 2024.

Wiener, Anna. "What Is It About Peter Thiel?" The New Yorker, 27 Oct. 2021, www.newyorker.com/news/letter-from-silicon-valley/what-is-it-about-peter-thiel. Accessed 15 Oct. 2024.