‘The Contrarian’ Profiles Peter Thiel, PayPal Co-Founder And Political Provocateur – Capital Public Radio News
By Dave Davies | FA
Tuesday, September 21, 2021
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Bloomberg Businessweek reporter Max Chafkin talks about the tech billionaire who broke with most of Silicon Valley in backing Trump. Thiel also secretly funded the lawsuit that bankrupted Gawker.
Transcript
DAVE DAVIES, HOST:
This is FRESH AIR. I’m Dave Davies in today for Terry Gross. The American tech industry is known for producing some interesting characters as CEOs – Steve Jobs, Bill Gates, Mark Zuckerberg. Our guest today. Bloomberg Businessweek tech reporter Max Chafkin has a new book about one of Silicon Valley’s more unusual figures, Peter Thiel. He co-founded PayPal, made a fortune running a hedge fund and was an early investor in Facebook, where he still serves on the board of directors. He’s also a libertarian conservative who broke with most tech industry figures by embracing the candidacy of Donald Trump. He’s known for secretly financing wrestler Hulk Hogan’s invasion of privacy lawsuit which bankrupted the website Gawker. And he’s shown an interest in some unconventional ideas, like establishing independent city states that float on the ocean, free from oppressive governments, and fighting aging by getting blood transfusions from young people.
Max Chafkin is a features editor and tech reporter at Bloomberg Businessweek. His work has also appeared in Vanity Fair, Inc and The New York Times Magazine. His new book is “The Contrarian: Peter Thiel And Silicon Valley’s Pursuit Of Power.” Well, Max Chafkin, welcome to FRESH AIR. You write that, when you were a tech reporter, that Thiel seemed to hang behind or above or somewhere in the middle of almost every story I reported about the tech industry. And we’re going to talk about his career some. But what do you mean that he was hanging in and over these stories?
MAX CHAFKIN: Yeah. You mentioned the kind of top line biography. You know, he invested in a bunch of well-known companies. I think, most famously, he’s the first investor in Facebook. But the thing that makes Peter Thiel kind of really interesting and who, especially back then, you know, from the perspective of a tech reporter in the mid-2000s was this thing called the PayPal Mafia. It was a group of people, you know, an informal collection of entrepreneurs and investors – basically led by Peter Thiel – that were moving money around and doing some really interesting and, you know, in retrospect, amazing things with it. And so that group includes Thiel and some of his co-founders, you know, Max Levchin and Elon Musk.
So the PayPal Mafia finds its way into SpaceX, Elon Musk’s company. It finds its way into YouTube, Yelp, LinkedIn. There’s just this really long list of really important kind of influential companies that came out of Silicon Valley at the same time. And they all either have Peter Thiel’s money in them or they’re run by friends of Peter Thiel. And what you start to see is this kind of influence network growing where employees are bouncing from one PayPal Mafia company to the next.
DAVIES: I guess we should quickly add that when we talk about the PayPal Mafia, we are not talking about an organized crime syndicate. This means a group of pals who stuck together and pursued some common interests. Tell us a bit about his childhood. What kind of kid was he?
CHAFKIN: I mean, he was a lonely and very smart and very serious boy. You know, the family moved around a lot. They bounced from Cleveland to South Africa and Namibia and then finally wound up in Silicon Valley. And, you know, as a result, I don’t think he had a lot of friends. I think he’s very bookish. And as a result, he was bullied to some extent as a child and I think sort of comes into the world feeling a little bit aggrieved and maybe justifiably aggrieved.
DAVIES: So he ends up going to Stanford, where, you know, a lot of the student body is liberal. How did he fit in there? What kind of interactions did he have?
CHAFKIN: It’s funny. Thiel wrote a lot, and he edited a student newspaper there. And to read that – this sort of creative output, you would think Stanford is this kind of crazy left-wing place where conservatives are being discriminated against constantly. Of course, that’s not totally true. I mean, I think Stanford, compared to some of the other kind of elite universities, is probably more conservative. The Hoover Institution, which is this big conservative think tank, it literally looms over the entire campus. Back in the ’80s, when Thiel, was there, a lot of the Reagan White House people came out of Hoover and out of Stanford.
But Thiel processed it differently, and he kind of falls into this identity where he is going to be this great provocateur. He’s going to be the one to stick it in the eye of the Stanford administration. And the grievances are many, but they all kind of come down to, you know, this elite leftism that he found oppressive. You know, you go back and read the student newspaper that he edited, The Stanford Review. And, you know, a lot of what’s in there is really kind of outrageous and, you know, deliberately provocative – trolling would be a kind of modern way to talk about it. The other thing is that’s important to say is Peter Thiel was back then and is today incredibly ambitious. And being the provocateur was at that time, you know, a really great way to kind of rise in the world of conservative politics, as it still is. So I think it’s both things. I think it’s both a combination of ambition and then genuine belief.
DAVIES: One of the things he’s best known for is financing the lawsuit by Hulk Hogan, which essentially drove the website Gawker into bankruptcy. This essentially involved a blog owned by Gawker Media outing Thiel as gay. Thiel was gay. How open was he about his orientation then – back then?
CHAFKIN: He’s never given an entirely clear answer. But, you know, having talked to a bunch of people who are in his orbit at that time, I think he was – he was out to his friends. You know, his colleagues knew that he was gay. He had, you know, brought a boyfriend to the Christmas party. So he was reasonably out. I think open secret is probably, you know, the way you would put it. But he was not out publicly. I mean, the media had certainly not discussed his sexuality until Gawker came along. And I think it’s likely that, you know, many of his business partners, especially the business partners in the hedge fund world, these big, you know, sovereign wealth funds, you know, overseas that are investing in his hedge fund, you know, I imagine they had no idea, either.
DAVIES: Now, Gawker Media was founded by Nick Denton, who actually is also gay. And I guess it did a lot – it was known for doing a lot of exposes. And they had a tech blog called Valleywag, which is where the offending piece came in. Tell us what its content was like.
CHAFKIN: I mean, Valleywag – and I remember it as a reader – it was outrageous, you know, deliberately outrageous. Their early posts were all about, you know, who’s having an affair with whom? You know, whose mistress is whose? You know, it was just like the – often, you know, the most petty, you know, just deliberately provocative stuff, kind of not all that dissimilar from, honestly, from the kind of newspaper that Thiel ran back at Stanford.
They were also doing – and I think it’s important to say this – they were doing important journalism alongside this very tawdry, you know, just ridiculously gossipy stuff where they were, you know, exposing people in the world of business who were not being totally straight, you know, about their businesses. They were calling BS on companies that were bad. So it was kind of a dual thing where some of their journalism was honestly pretty good, and then some of it was, you know, I think especially in retrospect, just, you know, kind of, you know, bad and embarrassing. And so it wasn’t just that they, you know, outed Peter Thiel. They were also writing, you know, very negative stories about his hedge fund and, you know, writing negative stories about his friends in tech.
DAVIES: So describe the blog post that effectively outed Peter Thiel as gay.
CHAFKIN: Yeah. The title was “Peter Thiel Is Totally Gay, People.” And it was framed as a meta commentary on, you know, on what is out and what – and why – it was sort of asking the question, you know, why is he out to his friends and not out to the rest of the world? What does that say about, you know, Silicon Valley? I talked to the – for the book, I talked to the author of the blog post. And, you know, he said – he told me he did not consider it to be an outing. He felt like he was out. Everybody knew he was out. He had a Friendster profile at the time that that made it clear that he was gay. And so I think, Thomas, this journalist, was trying to do something subtle and, you know, create a commentary on the closet. But of course, the headline, the gist of it, you know, was read by Thiel as an attack and as a violation of his privacy. And that seated this grudge that went on for years and years – for eight years between that post and when the Hulk Hogan lawsuit resolved.
DAVIES: Yeah. I mean, it didn’t strike, you know, the industry like thunder – right? – not a huge reaction to it. What was Thiel’s private reaction as you came to understand it?
CHAFKIN: Yeah. He completely was thrown off his game in the months that followed this post. And it’s hard to know exactly what threw him off his game because there was other things happening at the same time. The economy in 2008 – you know, obviously, the economy started kind of catapulting to the financial crisis. Interestingly, Thiel saw it coming and called it correctly, but then made a bunch of bad investments. He had this kind of contrarian insight that the economy was going to crash. And then he came up with, like, a contrarian take to his own contrarian take and, as a result, started buying stock when he should’ve been selling. The hedge fund collapsed. So this kind of personal embarrassment that Valleywag had started also coincided with a really profound business setback. And I think those two things together, you know, created this kind of tailspin, emotional tailspin, that ultimately led to the lawsuit.
DAVIES: The website and Gawker kind of continued to needle Thiel from time to time over the years. And he nurses this grudge and the big showdown comes in him backing a lawsuit filed by the former wrestler Hulk Hogan. I guess his – Terry Bollea is his real name. Tell us what the suit was about.
CHAFKIN: Gawker had published a sex tape of Hulk Hogan having sex with his best friend’s wife. And the story of the tape was – it is and was incredibly tawdry. You know, the tape was secretly recorded. Hulk Hogan claimed not to know about it. And – but it ended up being, basically, a clear-cut – a pretty clear-cut, anyway, invasion-of-privacy case where they had – it’s much less complicated than the actual inciting action, this, you know, kind of think piece-y, you know, contemplation on the nature of the closet. But what it really – but that’s not what caused Gawker to be destroyed. What caused it to be destroyed was this Hulk Hogan tape. Thiel, through an intermediary – he’s always working behind the scenes – kind of found this cut-out to hire Charles Harder, who at the time was, basically, an intellectual property lawyer from Los Angeles, to pursue this litigation. And Thiel hides behind the scenes. He doesn’t disclose it at all while the trial is going on, which I think is part of the reason Hulk Hogan was able to win at the trial and that the judgment was so great, you know, around $100 million.
DAVIES: Right. And, you know, what always puzzled me about this is that, typically, this kind of a suit, which is often a libel or a slander suit – I guess invasion of privacy in this case – is that a lawyer will take that out on a contingency basis. You don’t have to pay the lawyers upfront. Why was there a need for such heavy payments to prosecute the suit?
CHAFKIN: So the Gawker team totally misjudged this. You know, they thought – you know, most of the time when media outlets get sued, you know, they end up getting settled – right? – for – maybe it’s a big sum, but it’s not $100 million. And what ended up happening was that there were a bunch of settlement offers made by Gawker that Hulk Hogan – Terry Bollea – repeatedly rejected because the whole point of this was not to, you know, get Hulk Hogan paid a small amount of money. It was, in Peter Thiel’s mind to – you know, to destroy Gawker, to bankrupt it. And it becomes this huge trial. It’s in the Tampa Bay Area, where Hulk Hogan is a huge celebrity. And it’s this kind of – his lawyer’s painted as this sociopathic, New York media company up against a local hero. And they published his sex tape. And the jury was not at all sympathetic to Gawker and awarded a huge settlement that ultimately, you know, resulted in the bankruptcy of Gawker and the personal bankruptcy of Nick Denton.
DAVIES: Right, the founder. You know, it’s interesting. As you describe this – throughout this, Gawker suspected somebody who was out to get them and was financing it. They couldn’t figure it out. How did it finally emerge that Thiel was the guy?
CHAFKIN: They had made so many enemies over the years. So they were looking at – and they had gotten a tip, you know, that – the tip was a little bit off, but it was that they had outed a wealthy billionaire’s son as gay. And so they went looking for, you know, who are the potential wealthy billionaire sons who we might have outed? They couldn’t find anyone. But they did start to suspect Thiel. And, you know, just not long after the trial ended, Forbes magazine reported that Thiel was the secret backer. And then the next day, Thiel goes to Andrew Ross Sorkin at The New York Times and basically outs himself. It’s unclear to me exactly who – you know, how Forbes got to that scoop. I think it’s possible that Thiel might have tipped them off himself. He was and, I think, is very proud of that and saw it not as something to be embarrassed about, not as, you know, an oligarch silencing a prominent group of journalists, which is, I think, how a lot of journalists saw it, but as, you know, a philanthropic – he actually used the words philanthropic action – you know, on behalf of privacy.
DAVIES: And, of course, it’s a little odd that a libertarian would want to shut down a publication.
CHAFKIN: It’s completely inconsistent with libertarianism, I think. And I think there’s lots of stuff about Thiel that, you know – I think describing him as a libertarian, you know, is way off. He also, you know, started this gigantic surveillance company, Palantir, which I think is about 180 degrees from what you and I would think of, probably, as libertarianism.
DAVIES: We need to take a break here. Let me reintroduce you. We’re speaking with Max Chafkin. He’s a features editor and tech reporter for Bloomberg Businessweek. His new book is “The Contrarian: Peter Thiel And Silicon Valley’s Pursuit Of Power.” We’ll continue our conversation in just a moment. This is FRESH AIR.
(SOUNDBITE OF GERALD CLAYTON’S “ENVISIONINGS”)
DAVIES: This is FRESH AIR, and we’re speaking with Bloomberg Businessweek tech reporter Max Chafkin. He has a new book about billionaire investor and tech industry executive Peter Thiel. It’s called “The Contrarian: Peter Thiel And Silicon Valley’s Pursuit Of Power.”
So he finishes Stanford, does well, obviously, and gets admitted to Stanford Law School, stays there, gets through law school. I think he has a federal judge clerkship, and then he goes to a corporate law firm and decides he doesn’t like that and becomes a financial derivatives trader at Credit Suisse. That gets him into the financial world. We kind of know him first, I guess, as a major investor, as a co-founder of PayPal. Thiel was not a techie guy. He was not a computer geek. How did this happen? How did he have money to invest in something like a startup like PayPal?
CHAFKIN: No. And this is what’s so amazing because he didn’t have the technical skills, as you say. He’d kind of washed out of corporate law. And he’d only lasted – he didn’t last very long in finance either – comes back and basically scrounges together some money from friends and family. You know, we’re not talking about a huge sum here, but it’s enough to make a small investment, you know, on the order of $100,000 in PayPal, which at the time was – it was basically a one-man operation, this other coder that he found, Max Levchin. And they kind of zig and zag and eventually, you know, found their way to become a tech startup. But as you say, it almost happened by accident. Or maybe it happened because he had the, you know, ambition and skill to put himself in that position.
DAVIES: Well – and I think he saw something in this idea of this payment system that his partner didn’t quite – he could see its broader implications, right?
CHAFKIN: Well, yeah, that’s what’s so crazy. You go back, and you read the things that Peter Thiel was telling people in the late ’90s. You know, payments at the time, they were pretty common. There were – everybody kind of knew that, you know, you were going to move money around on the internet. Thiel talks about payments as a vector for freedom. He talks about, you know, PayPal is going to be the equivalent of a Swiss bank account in your pocket. It’s going to be a way so that repressive governments can’t stop their citizens from moving money out of the country. And this is exactly the way, by the way, now people talk about cryptocurrency. But it was this, you know, money as a libertarian sort of vector – as a way for freedom, which – you know, of course, it’s also a tech startup. But it had this kind of ideological backing, and I think that actually gave it some power and cohesion.
DAVIES: The story that you tell about how PayPal and how it grew as kind of this bunch of buccaneers who took a lot of gambling and porn transactions, that’s interesting stuff. But the company grows enormously and eventually is taken over by eBay. And there’s a – that’s a fascinating story. The company goes public. It gets bought by eBay. And it’s going to be a subsidiary of eBay – if I have this right – with Peter Thiel as the CEO. So it’s a huge payday for him. And then suddenly, he announces, no, he’s going to leave and start a hedge fund. Just say a bit about the strategy he was engaging here, what it meant to all these people who he had brought along in this enterprise.
CHAFKIN: So the story here that I heard from, you know, numerous former PayPal employees and people who were there is that he basically didn’t bother telling anybody he was going to leave. You know, they read about it in a press release that Peter Thiel, this guy who had been their leader, who had been – you know, they were brothers in arms, you know, against the world and the banking system, you know – was leaving to start a hedge fund, which obviously, like, from a Silicon Valley cultural perspective, a hedge fund is, like, 180 degrees removed from entrepreneurship. I mean, entrepreneurs – you know, your kind of stereotypical Silicon Valley entrepreneur, you know, hates hedge fund managers. Those are the suits. And Thiel was going to do just that.
And so that was, you know, from the point of view of some of the people who were there, you know, a bit of a betrayal or a sense of, you know, just him not really caring what other people thought. But obviously, for Thiel, he was able to cash out, and it gives him the opportunity to start this entirely new life and sets him up, honestly, for a lot of the success that came in the, you know, in the next decade.
DAVIES: Yeah, he was then very wealthy. How did it change his lifestyle?
CHAFKIN: Yeah, he started living like a kind of a stereotypical hedge fund manager. It’s pretty funny because a lot of this stuff has gotten ironed out by history. You know, he eventually invested in Facebook, and he kind of becomes, again, this Silicon Valley guy. But there’s a time when he owned a sort of nightclub. He was publishing a NASCAR magazine, and it was staffed by all these conservative journalists. So it was sort of like a sports magazine, but it was attempting to kind of do some of the same culture war stuff that he had been trying to do as an undergraduate.
All this stuff really didn’t work, but it did set him up to have a very successful hedge fund. And there was a time, you know, in 2005, 2006, you know, right as I was starting out covering tech, if you asked somebody, just a random person on the street who maybe reads The Wall Street Journal or something, who’s Peter Thiel? – what they would say is not he’s a Silicon Valley investor, they’d say he’s one of the world’s most successful hedge fund managers because Thiel had a hedge fund worth billions of dollars at the time.
DAVIES: We need to take a break here. Let me reintroduce you again. We are speaking with Max Chafkin. He’s the features editor and tech reporter for Bloomberg Businessweek. His new book is “The Contrarian: Peter Thiel And Silicon Valley’s Pursuit Of Power.” He’ll be back to talk more after this short break. I’m Dave Davies, and this is FRESH AIR.
(SOUNDBITE OF CHARLIE HUNTER & LEON PARKER’S “THE LAST TIME”)
DAVIES: This is FRESH AIR. I’m Dave Davies, in today for Terry Gross. We’re speaking with Bloomberg Businessweek reporter Max Chafkin, who has a new book about billionaire investor and tech industry executive Peter Thiel. Thiel is a self-described libertarian who’s embraced the candidacy of Donald Trump and is known for floating some pretty unconventional ideas. Chafkin’s book is “The Contrarian: Peter Thiel And Silicon Valley’s Pursuit Of Power.”
He had quite a career. I mean, he was an early investor in Facebook – made a lot of money there and had this ongoing relationship with Mark Zuckerberg. But, you know, what I want to do is talk about some of the really unconventional ideas that he has propagated at various times and in various ways over his career. I mean, sometimes people say provocative things that they rethink later, but I wanted to talk about some of them. Early on, he wrote a book – co-authored a book with a guy named David Sacks called “The Diversity Myth.” This was, I guess, when he was at Stanford Law School or just after. When was this?
CHAFKIN: Just after – it was in 1996.
DAVIES: Right. Among other things, offered some opinions about consent and sexual assault, right?
CHAFKIN: Yeah. So the premise of the book was that universities were too liberal. It complained about basically affirmative action and efforts to make, you know, Black and Hispanic students feel more welcome on campuses. And it also complained about efforts, I think, to make women feel safer. And there’s a line in the book that describes, you know, rape – date rape as, you know, seductions later regretted. Now, both men who – both the writers, Peter Thiel and David Sacks, who was his co-writer and who worked for him at PayPal – they apologized for that, you know, many years later. But, I mean, it was a big theme. There was also a rape issue of The Stanford Review that expressed very similar points of view. So it’s a, you know, an extremely conservative kind of cri de coeur about the scourge of kind of left-wing cultural ideas.
DAVIES: He wrote an essay in 2009 – and I think this was for the – a publication run by the Cato Institute, which is funded by the Koch brothers, if I have this right – in which he said, among other things, I no longer believe democracy and freedom are compatible. What was he saying?
CHAFKIN: Well, it was ostensibly about libertarianism and about how he was coming to question whether libertarianism was a good idea and in doing so, kind of comes to embrace this pseudo-authoritarian philosophy, which I think actually defines his belief going forward. And it’s behind a lot of the other, you know, political things and ideological things that he’s done. He also writes in that essay that, you know, women’s suffrage is kind of an unfortunate thing because women tend to vote left, and it’s therefore hurt the cause of, you know, freedom or whatever.
But, of course, like, you know, to any – to most people’s perspective, saying – you know, treating, you know, the rights of, you know, half the population to suffrage as this kind of, oh, unfortunate thing is – you know, it’s pretty deplorable. He kind of walked it back but never really. He hasn’t ever – you know, he sort of said people are taking this too hard, too seriously or something, but he’s never actually, like, changed his point of view there. He just sort of half apologized for writing it.
DAVIES: Right. Just to give the full context, the quote is “Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women, two constituencies that are notoriously tough on libertarians, have rendered the notion of a capitalist democracy an oxymoron.” So it’s not just women, it’s welfare beneficiaries.
CHAFKIN: Right.
DAVIES: Yeah – so undermining democracy. You also note that in his book, which is – you know, it did very well – about – it’s, I guess, about entrepreneurship, called “Zero To One” – you write that he argues that monopolies are good and that monarchies are the most efficient form of government. Now, saying something that’s – is efficient doesn’t necessarily mean it’s desirable. But is he really – I mean, what’s he advocating here?
CHAFKIN: Well, it’s really hard to know. And I think Thiel has made some effort to, you know, try to couch his most extreme points of view, you know, in these kind of clever ways, in these clever formulations. But, I mean, when you look at that and you look at some of the other things he’s written about sort of authoritarianism and some of the ideas that have come out from some of these ideological – these thinkers that he funds and supports, I mean, the basic point of view is that companies are the most efficient way of organizing an organization – like, a capitalist company with an all-powerful or nearly all-powerful CEO – and wouldn’t it be great if, you know, America had one of those? Or maybe we don’t necessarily want to do that because there would be some negative consequences, but the idea is that this would be, in some ways, desirable. And there’s lots of this kind of very out-there philosophy in this book that’s really framed as, like, a self-help book and I think is read by most people as a self-help book. But it – yeah, it contains all kinds of crazy stuff. It talks about founders as being, you know, like gods. And the monopoly thing, I mean…
DAVIES: That’s founders – that’s meaning entrepreneurs, right?
CHAFKIN: Yeah, exactly – so, you know, Mark Zuckerberg or something. And this notion that, you know, the height of business achievement is monopoly profits. And I think that’s pretty inconsistent with kind of both liberals and conservatives. You know, most, capitalists – that’s pretty inconsistent with our vision of what – how capitalism is supposed to work.
DAVIES: You know, I’m sure you would have liked to have had a thorough discussion with Peter Thiel about this. Maybe you should give us a sense of what kind of sources you checked and what access you had to Thiel himself to talk about these things.
CHAFKIN: Yeah. So Thiel is incredibly locked down. I mean, you know, he’s literally destroyed a media company for writing things that he didn’t like. And that creates – you know, that creates a lot of challenges, obviously. People – you know, I spoke to, you know, over 150 people who were – who had worked for him, who were friends with him, who had done business with him and also spoke, you know, off the record, you know, with Thiel himself. I was, you know, in touch with his – with him and with his, you know, representatives and presented them with a long list of, you know, fact-checking questions before I published the book.
He – despite talking to me off the record, he never engaged, you know, on the record. And he has, you know, really made an effort to protect his privacy, you know, as we can see with the Gawker litigation, but also to kind of control the narrative about himself. And I think that’s been one of the sources of his power. I mean, he’s – a lot of these tech guys are known as amazing technologists, as futurists. But a lot of them, including Thiel, they’re great marketers. And Thiel is an amazing kind of – it’s weird to say this, but kind of an amazing influencer, somebody who’s able to shape his own personal narrative and cultivate this army of followers that’s, you know, in some places, borderline – bordering on, you know, cult-like.
DAVIES: And he didn’t respond to the list of fact-checking questions for the book, right?
CHAFKIN: No, not on the record.
DAVIES: OK. We should also just note – we haven’t talked about it much – but he founded this company called Palantir, and it’s had subsidiaries. And I guess you’d describe it as data collection and analysis and software to manipulate the data, which has gotten plenty of private and government contracts, right?
CHAFKIN: Yeah. It’s – I think data mining is probably the simplest way to think about it. You know, there’s all this information that we’re generating all the time – you know, our locations on our phones, you know, when we log into social media, anything like that. And the idea is – and this is not unique to Palantir, but the idea is that you take all this information, and you can understand, you know, very sophisticated things. And it was originally sold as a technology to stop terrorism. Thiel founded it kind of in the post-9/11, you know, feeling that we hadn’t done enough to spot the patterns that would have indicated us that 9/11 was about to happen. And he’s sold it to the military, intelligence agencies and increasingly private companies.
And, you know, their data mining – this isn’t unique to Palantir. But Palantir – it applies to Palantir. I mean, data mining doesn’t sound that scary when you talk about it. But the truth is that this data, that these kind of mundane little bits of data, if you put them together in the right way, you can understand people in a very personal way. You know, you can understand their sexuality. You can understand that they’re pregnant or not by what they’re purchasing. You know, you can tell a lot about a person by looking at their movements and their data.
And so the concern from privacy advocates, which I think is a legitimate concern, is that if you have this data and then you have a pattern of not being 100% careful with it, which is the case with Palantir – that you can have – you can run into, you know, ethical problems where people are going to have access to personal information that they really shouldn’t have. And that’s law enforcement, intelligence and also private companies.
DAVIES: You said Palantir collects a lot of data, maybe not being as careful custodians as they should be. What kind of problems have they encountered?
CHAFKIN: So there have been a handful of things that have come up with Palantir. Now, some of this – some of the complaints are going to be around sort of the U.S. government, which is obviously Palantir’s, you know, main partner and, as we know from the Edward Snowden revelations, has at times been overenthusiastic in terms of its collection of data. Palantir itself, though, has over the years pushed the envelope in all sorts of ways that have caused people to sort of question how great a custodian it is. So they, you know, about – over a decade ago participated in this proposal to use some sort of dirty tricks against journalists. It came out. They apologized.
I spoke to former Palantir employees who described, you know, various instances of sort of envelope pushing – you know, doing things, offering to collect information in ways that seemed inconsistent with, you know, the ethic of, you know, privacy and data custodianship. And Palantir, of course, got roped in with the Cambridge Analytica scandal. So, I mean, it wasn’t directly related. Palantir didn’t actually work for Cambridge Analytica. But it was a Palantir employee that suggested, as part of – as I report in the book, as part of basically a sales pitch, the approach that Cambridge Analytica used to steal the Facebook information from tens of millions of Americans.
So they’re all – there’s all sorts of stuff that is kind of part – I think a defender of Palantir would just say, oh, well, they’re a startup. They’re doing what it takes. But when the startup is one that has access to, you know, data from the CIA or, you know, is surveying, you know, huge numbers of Americans, that’s going to raise some really important questions.
DAVIES: Let me reintroduce you again. We are speaking with Max Chafkin. He’s an editor and tech reporter at Bloomberg Businessweek. His new book is “The Contrarian: Peter Thiel And Silicon Valley’s Pursuit Of Power.” We’ll talk some more after this break. This is FRESH AIR.
(SOUNDBITE OF JOAN JEANRENAUD’S “DERVISH”)
DAVIES: This is FRESH AIR, and we’re speaking with Max Chafkin. He’s a features editor and tech reporter for Bloomberg Businessweek. His new book about billionaire investor and tech industry executive Peter Thiel is called “The Contrarian: Peter Thiel And Silicon Valley’s Pursuit Of Power.”
Peter Thiel famously embraced Donald Trump’s candidacy in 2016. But before that, I mean, you tell us that he actually had some connections to people on the extreme right. You want to just tell us a bit about what these are and what they amount to?
CHAFKIN: Yeah. So Thiel has always been, at least since his hedge fund days, you know, kind of dabbling in politics and especially far-right politics. So as a hedge fund manager, he was donating money to this group called NumbersUSA, which is a very, very hard-right immigration group. You know, it’s – the idea is reducing the amount of immigration drastically. He – and has always cultivated these sort of, you know, very provocative, you know, very conservative young people.
I mean, I think some of his, you know, old pals from the Stanford Review, if – you know, if they were existing during our time, they would have been kind of like the alt-right. They were these people who were being deliberately provocative, who were saying things that were bordering on racist or sexist and doing it to kind of, you know, get on the nerves of liberals, to troll the libs. And so not surprisingly, Peter Thiel, you know, starting in, you know, the early 2010s, was able to cultivate and start cultivating, you know, a number of these folks who later became, you know, active in alt-right politics in this kind of nascent Trump movement.
DAVIES: Right. And a key moment in the 2016 campaign was when the Access Hollywood tape emerged of Trump saying these outrageous things, and it looked to a lot of people like the campaign was over. How did Peter Thiel react?
CHAFKIN: Yeah. It’s amazing. He’d already endorsed Trump. He’d given a speech at the Republican National Convention that was kind of, you know, pretty well-received. It got a standing ovation. But he hadn’t written a check, which is strange for a billionaire. You would sort of expect that a billionaire would be leading with the wallet first. The Access Hollywood tape drops, and Thiel’s thought process initially was, OK, forget it; he’s cooked, just like everybody else. But then he, you know, talks to his advisers. And they basically decide that, actually, this Access Hollywood tape doesn’t matter at all, that Trump, you know – if anything, it might even help him. And it’s just days after the tape, he writes this $1.25 million check to a, you know, Mercer family PAC that’s supportive of Trump, and that kind of puts down a marker. He’s one of the first people – first prominent people to embrace Trump after the “Access Hollywood” thing, when a lot of people were still backing away. I think it helps Trump turn things around. And then that kind of vaults Thiel into this new level of influence where he is able to get on the transition committee, and he’s off to the races.
DAVIES: Did he stick with Trump through the 2020 campaign and the assault on the Capitol and these, you know, claims about fraud and a stolen election?
CHAFKIN: Thiel is, you know, in some ways, at his core, a hedge fund manager, and he almost played it like that. He didn’t cut ties with Trump. He sort of let leak little things saying he wasn’t totally on board. But he also never broke with him. And he basically tried to thread this needle where he’s able to maintain his influence in Trumpism, in this kind of nascent world of populist nationalist politics that we’re seeing, you know, is still growing, is still thriving – there’s a, you know, huge part of the country that still supports Trump – without necessarily being tarnished by those things you talked about, you know, without having to sort of take responsibility for, you know, the insurrection on January 6 or, you know, Trump’s failures, you know, with respect to the coronavirus. So now you’re seeing him kind of emerge as a right-wing GOP power player where he’s backing these sort of people who are allied with Trump but who aren’t Trump. And that seems to be how he’s playing it.
DAVIES: Yeah. Who’s he backing?
CHAFKIN: So two key names. One is Blake Masters, who’s running for Senate in Arizona. Blake Masters works for Peter Thiel. He’s the chief operating officer of Thiel Capital, which is the – basically, the family office that manages Peter Thiel’s money. And then J.D. Vance, who does not literally work for Peter Thiel but did work for Thiel, one of his venture capital funds, around the same time that he was writing this book, which became a bestseller, “Hillbilly Elegy,” and who is – you know, has started this venture capital fund called Narya, in which Thiel is an investor. He’s put $10 million bucks into each of their – into PACs supporting each of their campaigns.
And these guys are running, really – you know, as I talk to people, you know, in the Thiel inner circle, they’re trying to sort of do Trumpism without Trump. So they’re embracing the wall, you know, hard-line immigration, kind of cultural populism, white grievance – like, a lot of the things that we sort of associate with Trump but, you know, of course, not being Trump. And they’re both – they’re running in contested races. They may not win, but I think it’s – it gives you a sense that this guy isn’t going away. He wants to be a major player. And I think there’s a chance, you know, coming out of 2022, he’ll have more influence than he did, you know, even in 2016.
DAVIES: Well, Max Chafkin, thanks so much for speaking with us.
CHAFKIN: Thanks for having me.
DAVIES: Max Chafkin is a features editor and tech reporter for Bloomsberg (ph) Businessweek. His new book is “The Contrarian: Peter Thiel And Silicon Valley’s Pursuit Of Power.” This is FRESH AIR.
(SOUNDBITE OF JAKE MASON TRIO’S “THE STRANGER IN THE MIRROR”) Transcript provided by NPR, Copyright NPR.
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