From: allin
Peter Thiel, described as one of the most successful technology investors globally, co-founded PayPal, was the first outside investor in Facebook, and co-founded Palantir [00:00:10]. His philosophy often centers on risk-taking: “In a world that’s changing so quickly, the biggest risk you can take is not taking any risk” [00:00:05]. He believes the future is not fixed and emphasizes the importance of human agency [00:00:31].
Political Engagement and Outlook
Thiel is sitting out the current political cycle, a departure from his previous strong involvement where he significantly backed figures like JD Vance [00:01:04]. While he remains “very strongly pro-Trump” and “pro-JD,” he has chosen not to donate money politically this cycle, though he supports them in “every other way possible” [00:01:34].
Election Predictions
Thiel holds a pessimistic view that Donald Trump will likely win the upcoming election, potentially by a large margin, performing better than in the last election [00:01:57]. However, he anticipates that despite a victory, there will be “buyers remorse and disappointment” because elections are often a “relative choice,” where the preferred candidate is simply “less bad” than the alternative (e.g., “more anti-Harris than anti-Trump”) [00:02:11]. He states that the current political dynamic is “all negative” [00:02:28].
Despite the potential for a large margin, Thiel sees the odds as “basically 50/50” for Trump [00:02:47]. His “one contrarian view” is that the election “is not going to be close,” as most presidential elections tend to result in one side decisively breaking away [00:02:51]. If, however, the election were to be “razor thin close,” Thiel believes the opposition would win due to what he terms “cheating,” “fortifying,” and “stealing the ballots” [00:03:35]. This belief influences his decision not to be actively involved: if it’s close, he doesn’t want to be involved, and if it’s not close, he doesn’t need to be [00:03:50].
Election Integrity Concerns
Thiel uses the term “fortify” when discussing election processes to avoid being “canceled” [00:04:14]. He mentions “ballot harvesting” and rule changes that were “done in plain daylight” [00:04:19]. He asserts that U.S. elections are “not perfectly clean” [00:04:27].
To improve election integrity, Thiel suggests changes that align U.S. practices with other Western democracies:
- One-day voting instead of an “elongated process” [00:04:47].
- Practically no absentee ballots [00:04:50].
- Stronger voter ID to ensure voters have the right to vote [00:05:05].
- Making election day a national holiday [00:05:15]. He notes that the U.S. electoral process has “meaningfully decayed” over the last 20-30 years, contrasting it with earlier periods when results were typically known on election day [00:05:21].
Desired Outcomes from a Trump Presidency
Thiel acknowledges that there are “extremely difficult problems” that are hard to solve [00:05:55]. For a Trump presidency to be unexpectedly positive, Thiel highlights two key areas:
- Deficit Reduction: He would be “very impressive” if Trump could “meaningfully reduce the deficit with no tax hikes and without GDP contraction” [00:06:11]. He notes the U.S. is facing an “incredibly big deficit,” which continues to grow beyond projections [00:06:03].
- Geopolitical Stability: Preventing a “China-Taiwan war” would be “incredible” [00:06:40]. He views conflicts in Ukraine and Gaza as “warm-ups” to this larger potential conflict [00:06:35].
Geopolitical Stance: China and Taiwan
Regarding Taiwan, Thiel believes the U.S. policy of not explicitly stating its response to a Chinese invasion is “roughly correct” [00:07:31]. He argues that declaring a “red line” or outright stating non-defense would lead to immediate invasion [00:07:43]. He suggests that not having a precise policy, or not even having a policy, is “relatively the best” approach to avoid immediate war [00:08:04].
When pressed on whether Taiwan is “worth defending” and risking “World War III,” Thiel states it’s “not worth World War III” [00:08:26]. However, he still believes it would be “quite catastrophic” if Taiwan were taken over by the Communists [00:08:32].
Economic Decoupling with China
Thiel anticipates an economic decoupling between the U.S. and China, likening the trade relationship to “100 pipelines” that will “blow up” if a conflict over Taiwan escalates [00:09:13]. He previously advised the CEO of TikTok to get the business out of China, predicting that TikTok would be banned “24 hours after the Taiwan invasion” [00:09:48]. He sees this as a “negative sum trade policy” where trade shifts from China to countries like Vietnam or Mexico, being “a little bit bad for the US, extremely bad for China and… really good for Vietnam” [00:13:34].
He advises against investing in companies competing domestically inside China, deeming it “virtually impossible” [00:11:27]. While acknowledging the past “Arbitrage” of building factories in China for export due to cheap labor (e.g., Foxconn’s 2/hour wages and crowded dorms), he predicts an inevitable decoupling [00:11:51]. This decoupling will likely be “pretty inflationary” for the U.S. [00:12:44].
Technology, Innovation, and the U.S. Economy
Thiel is critical of “buzzwords” in technology, including “AI,” which he historically viewed as one of the worst [00:17:07]. However, the advent of LLMs and ChatGPT, which he believes passed the Turing test, signifies something “very, very significant” [00:18:29]. He raises questions about AI’s impact on human identity, labor markets, and how to make money from it [00:19:10].
He likens AI in 2023-2024 to the internet in 1999: “It’s really big, it’s going to be very important, it’s going to transform the world not… in 6 months but in 20 years” [00:20:29]. Currently, he observes that Nvidia is making over 100% of the profits in AI, with everyone else collectively losing money [00:21:02]. He suggests focusing on the “chips question” (Nvidia’s monopoly) rather than specific AI models or companies when analyzing the market [00:42:47].
Thiel believes the U.S. has been in an era of “relative Tech stagnation” for the last 40-50 years, with the popular tagline being “they promised flying cars all we got was 140 characters” [00:26:44]. He attributes this to innovation largely being confined to the “world of bits” (computers, internet, mobile internet, crypto, AI) rather than the “world of atoms” (applied engineering fields like chemical, mechanical, aerospace, nuclear engineering) [00:27:49]. He suggests this stagnation is due to:
- Over-regulation in “world of atoms” industries [00:28:31].
- The “low-hanging fruit” getting picked, making innovation harder (though he calls this a “baby boomer excuse”) [00:28:39].
- A societal shift towards a “risk-averse society” after the two World Wars and the development of nuclear weapons [00:29:12]. He pinpoints Woodstock (three weeks after the moon landing) as a “tipping point” when “progress stopped” [00:29:31].
Domestic Economy and Debt
Thiel suspects the U.S. is “close to a recession,” which is being staved off by “really big government spending” [00:30:12]. He points out that the projected deficit for fiscal year 2024 is significantly higher than initially estimated [00:30:27]. He criticizes increasing deficits “at the top of the economics cycle” rather than during a recession [00:30:59]. He believes the U.S. has “too much debt, not enough sustainable growth” [00:31:11], largely due to a lack of Tech innovation and a reliance on one-time economic boosts from the past:
- 1980s Reagan-Thatcher era: Massive tax cuts, deregulation, and corporate mergers, which created “one great decade” but lacked compounding effects [00:31:47].
- 1990s Clinton-Blair era: Leaning into globalization, which offered a “giant global Arbitrage” [00:32:15]. Thiel believes both of these “one-time moves” are no longer viable strategies for growth [00:32:29].
Critique of Higher Education
Thiel established the Thiel Fellowship to encourage individuals to leave college and pursue innovative ideas [00:33:01]. He believes universities are “far worse” than he initially thought [00:33:32]. He argues that higher education is a “bubble,” citing the exponential growth of student debt (from 2 trillion currently) [00:34:11]. He notes that for recent cohorts, median student debt increased 12 years after graduation due to compounding interest and less well-paying jobs [00:34:51].
He attributes this bubble partly to a “Boomer narrative” where older generations, for whom college “really worked,” don’t understand the current challenges [00:35:30]. He suggests the bubble will end once “the Boomers have exited stage left” [00:35:56]. While acknowledging the government’s role in underwriting student loans (which removes market discipline from lending and leads to inflated costs), Thiel also holds a “leftwing” view that a lot of students “got ripped off” and there should be “some kind of broad debt forgiveness” [00:36:02]. However, he insists that the universities and bondholders, not just taxpayers, should bear the cost of such forgiveness [00:37:11]. He also points out that U.S. bankruptcy laws prevent student debt from being discharged, even in bankruptcy [00:37:33].
If the government ceased underwriting student loans, Thiel believes a “totally free market system” would lead to a “much smaller” higher education sector, potentially reducing the number of “bureaucrats” that have proliferated within universities [00:38:27].
Personal Views on Optimism and Pessimism
Thiel pushes back on being labeled optimistic or pessimistic, viewing both extremes as “really bad attitudes” and “somehow the same thing” [00:44:35]. He states that “extreme pessimism” implies nothing can be done, while “extreme optimism” suggests the future will take care of itself [00:44:50]. He believes in “human agency” – that “it’s up to us” to shape the future, not luck or astrology [00:45:02]. He concludes that both extreme optimism and extreme pessimism are “excuses for laziness” [00:45:19].