Why Silicon Valley Billionaire Peter Thiel Endorsed Donald Trump

If you weren’t wowed by Scott Baio or Antonio Sabado Gigante Jr. at the Republican convention, surely you’d be impressed by PayPal co-founder Peter Thiel. Along with Elon Musk and Max Levchin, Thiel made hundreds of millions from Paypal. Since then, Thiel turned a $500K early investment in Facebook into $500 million. He also founded one of the most valuable startups in recent history, Palantir. His investments and deep-thinking on economics reveal a bold contrarian streak. For example, he thinks the traditional college system has failed. So he created a program to give high school grads $100K to start their own companies instead. So why would this wildly successful, deep-thinking Silicon Valley tycoon support Donald Trump? Here are four possible reasons.

1) Vox recently gave a good partial explanation – a philosophical one. Peter is so disillusioned with our current systems (political, banking, education) that he thinks they should be demolished and rebuilt from scratch. He certainly hinted that in his convention speech. And Trump may just be the wrecking ball to do it.

2) Trump is the ultimate contrarian bet. Legendary investor Warren Buffet says, “Be fearful when others are greedy and greedy when others are fearful.” No one in Silicon Valley would touch the Donald Trump hot potato. His blustery rhetoric, anti-immigration policies, and general unpredictability scared off every prominent backer. In fact, some of Silicon Valley’s who’s who signed an open letter against Trump. Not Peter Thiel.

 

I think Thiel is making a long-shot bet. If Trump wins, Thiel will wield power no amount of lobbying could buy. As an early, enthusiastic supporter, he would be Trump’s first phone call on all tech matters. Thiel would be the voice – and gatekeeper – for all others in Silicon Valley who seek access to President Trump. Thiel wouldn’t have anywhere near that kind of influence with Clinton. She has a mob of industry executives backing her – and building her technology. Thiel is being greedy while others are fearful.

Trump’s malleability is Thiel’s opportunity.

3) Trump is a tabula rasa (blank slate) when it comes to tech. He’s been quoted as wanting to “close up” the internet to stop terrorism. He’s wants to force Apple to build iPhones here to create jobs, ignoring that modern, automated factories create very few of them.  Trump has called net neutrality (equal free access to the web) a government power grab. He doesn’t even have a computer on his desk and yells out his Tweets to his assistants. This creates lots of room for Thiel to fill in the blanks. Many, many blanks…. Plus, Trump is notorious for switching positions from left to right and day to day. Trump’s malleability is Thiel’s opportunity – to turn the US into a living laboratory for his radical, experimental ideas.

4) Most importantly, Thiel can afford to make this choice. It won’t affect his bottom line. He has something called “FU Money”. As a vaunted investor and chairman of Palantir, Thiel dispenses money and advice. Those who want it aren’t going to run away because of politics. In fact, it pads his reputation for eccentricity and contrarianism. He is Silicon Valley’s Wizard of Oz. People will always want to meet the man behind the curtain.

One curious side note about Thiel’s endorsement speech: It was the first time, to my knowledge, he publicly acknowledged that he’s gay. It’s something he kept private until Gawker outed him years ago. He vowed revenge and years later, got it. By financing Hulk Hogan’s successful lawsuit, he drove Gawker into bankruptcy. Ironically, in Thiel’s circles, coming out as gay carries far less stigma than coming out as a Republican…or a Trump supporter. But everyone has their reasons.

 

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