The Contrarian: Peter Thiel and Silicon Valley's Pursuit of Power

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Copyright © 2021 by Max Chafkin

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LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA

Names: Chafkin, Max, author.

Title: The contrarian: Peter Thiel and Silicon Valley’s pursuit of power / Max Chafkin.

Description: New York: Penguin Press, an imprint of Penguin Random House LLC, [2021] | Includes bibliographical references and index.

Identifiers: LCCN 2021007920 (print) | LCCN 2021007921 (ebook) | ISBN 9781984878533 (hardcover) | ISBN 9781984878540 (ebook) | ISBN 9780593300619 (international edition)

Subjects: LCSH: Thiel, Peter A. | Capitalists and financiers—United States—Biography. | Santa Clara Valley (Santa Clara County, Calif.)—Biography. | Power (Social sciences)

Classification: LCC HG172.T46 C43 2021 (print) | LCC HG172.T46 (ebook) |DDC 332.092 [B]—dc23

LC record available at https://lccn.loc.gov/2021007920

LC ebook record available at https://lccn.loc.gov/2021007921

designed by meighan cavanaugh, adapted for ebook by shayan saalabi

pid_prh_5.8.0_148814534_c0_r3

CONTENTS

Introduction

1. Fuck You, World

2. A Strange, Strange Boy

3. Hope You Die

4. World Domination Index

5. Heinous Activity

6. Gray Areas

7. Hedging

8. Inception

9. R.I.P. Good Times

10. The New Military-Industrial Complex

11. The Absolute Taboo

12. Building the Base

13. Public Intellectual, Private Reactionary

14. Backup Plans

15. Out for Trump

16. The Thiel Theory of Government

17. Deportation Force

18. Evil List

19. To the Mat

20. Back to the Future

Epilogue: You Will Live Forever

Photographs

Acknowledgments

Notes

Image Credits

Index

About the Author

INTRODUCTION

It may seem hard to remember, but there was a time when the world seemed ready to put Silicon Valley in charge of everything. This was 2016—the Age of Unicorns, as business magazines called it, referring to tech companies that were growing so quickly, and had become so valuable, that they seemed almost mythical. Jeff Bezos had saved one of America’s great newspapers, Mark Zuckerberg was romancing San Francisco politicos, who’d just named a hospital after him, and transportation activists were showing up in major cities to protest in favor of the disruptions brought on by Uber. President Barack Obama, his term winding down, was musing about relocating to California and becoming a tech investor as his next act. Venture capital, he told to reporters that spring, sounded like it could be very satisfying.

But even as the zeitgeist—all the way up to ambitions of the leader of the free world—celebrated the promise and potential of Silicon Valley, one of Silicon Valley’s pioneers had already turned his attention well beyond it. Over the prior two decades, Peter Thiel had accumulated billions of dollars in wealth, backing some of the biggest and most successful tech companies, including Facebook, PayPal, and SpaceX. He’d built a network that gave him access to the best entrepreneurs and the wealthiest investors in the world, and he was idolized by a generation of aspiring startup founders. But Thiel wanted more than sway in Silicon Valley—he wanted real power, political power. He was about to be handed an opportunity to seize it.

It came in the form of what appeared at first to be a minor scandal at Facebook, where Thiel had been an early investor. That May, the tech blog Gizmodo published a report claiming that the opinions of conservatives were being systematically suppressed by the social network. A small team of editors working on a new feature called Trending Topics said they’d been instructed to include stories from mainstream outlets such as CNN and The New York Times, but to leave out stories from right-wing media as well as those about fringe topics popular among conservatives, such as the unverified claim that the IRS had been targeting Tea Party‒affiliated nonprofits.

The scoop was modest—Trending Topics had nothing to do with the regular news feed, which was curated by algorithm and was full of right-wing content—but it enraged conservatives, who saw it as proof that Facebook was biased in a broader way. The Drudge Report, which had been among the banned outlets, led with a giant and unflattering picture of Zuckerberg’s deputy Sheryl Sandberg, the author of the book Lean In. not leaning in . . . leaning left! the headline screamed. facebook under fire was the Fox News chyron.

Facebook denied the allegations, but Zuckerberg sensed that this was a crisis to be managed, and he turned to Thiel to help him. On Wednesday, May 18, a group of sixteen prominent right-wing media personalities were summoned to Menlo Park for a meeting. They included talk show hosts Tucker Carlson, Glenn Beck, and Dana Perino; the presidents of the Tea Party Patriots, the American Enterprise Institute, and the Heritage Foundation; and a handful of others. Officially, they were there to see Zuckerberg and Sandberg, but Thiel was the reason many of them had made the trip.

At forty-eight, he was more than a decade older than the Facebook founder, but the two men had much in common. Like Zuckerberg, Thiel was ruthlessly competitive and awkward in social situations. They’d been close—Thiel had been Zuckerberg’s mentor and his patron, the first outside investor in his company and the first person in authority to grasp that Zuckerberg actually knew what he was doing.

Years earlier, Thiel had seen in the Facebook founder—an abrasive, socially inept young man whose chief business qualification at the time was that he’d hacked together a way to rate the attractiveness of his female classmates at Harvard—something huge. After investing in Facebook, Thiel had set up Zuckerberg with absolute control over it, helping to transform the kid with the words I’m CEO . . . Bitch on his business cards into the fairly polished capitalist he would become. The relationship had made both men spectacularly rich, and though Thiel no longer owned much Facebook stock, he remained on the company’s board and was still very much invested in its influence.

Zuckerberg and Thiel had drifted apart over the previous few years, as Thiel had become more entrenched in the world of conservative politics and Zuckerberg had embraced the spirit of the Obama era, starting a lobbying group aimed at promoting business-friendly immigration reform and pledging billions to the causes of advancing human potential and promoting equality.

But even as he cultivated Obama and others on the left, Zuckerberg had continued to rely on Thiel as a liaison to the American right. Thiel, according to Zuckerberg’s allies, was the company’s conservative conscience. Mark wants to have a balance at Facebook between left and right, said a former Facebook executive. He doesn’t think he can have a healthy debate if everyone’s a bleeding-heart Democrat. Zuckerberg’s critics saw Thiel’s influence on the company as more profound—and more pernicious. He was, in this view, the puppet master: pushing a younger, ideologically uncertain founder toward an alliance with an extremist wing of the Republican party.

As the group of conservative leaders arrived at Facebook’s sprawling Frank Gehry‒designed headquarters, Thiel and Zuckerberg were a study in shifting generational attitudes toward the concept of business casual. The Facebook founder wore his usual uniform, a gray T-shirt and jeans. Thiel wore a dress shirt with the sleeves rolled up and a pair of hemp-soled shoes. As usual, he carried himself as if braced for a collision—his shoulders hunched forward, his head tucked ever so slightly.

The group sat down at a large table, and Zuckerberg and Sandberg led them through a dense, technical presentation designed to explain that Facebook’s software, not editors, selected the vast majority of articles that appeared on Facebook. Zuckerberg asked if there were any questions—which the pundits took as an invitation to light into Facebook, the company’s left-leaning employees, and the general sense that Silicon Valley favored liberal causes.

They were letting him have it, recalled Glenn Beck, the talk radio personality and former Fox News host known for his histrionic conspiracy theories and goofy on-camera antics. He deserved some of it.

Beck was one of a handful of the attendees whom Thiel had been quietly cultivating. After he’d left Fox News under tense circumstances—rumor had it that Wendi Deng, Rupert Murdoch’s wife, had demanded his ouster amid his show’s conspiratorial turn during the Obama administration—it was Thiel who’d convinced him to focus on streaming videos and podcasts. You just have to decide if you are in the future or are you in the past, Thiel had told him.

Beck was fond of Thiel and, in the meeting, assumed the role of Zuckerberg’s defender. You’ve got thirty people who have spent decades defending freedom of speech, he said, addressing Zuckerberg and gesturing to his colleagues. And you have this platform that has given hundreds of millions of people the freedom of speech.

Zuckerberg seemed moved by Beck’s show of empathy. We built Facebook to be a platform for all ideas, he wrote on his Facebook page after the group departed. Our community’s success depends on everyone feeling comfortable sharing anything they want.

The message to employees, and the outside world, was clear: Facebook intended to allow supporters of Donald Trump, who was by then the de facto Republican nominee, to say more or less whatever they wanted on its platform. Over the next several months, misinformation on Facebook—much of it in Trump’s favor—outperformed real news. The most popular election headline on Facebook during that period, according to one study, was pope francis shocks the world, endorses donald trump for president, which, of course, never happened. Another claimed falsely that Wikileaks emails revealed that Hillary Clinton had sold weapons to Islamic State terrorists.

Zuckerberg would eventually apologize—sort of. We didn’t take a broad enough view of our responsibility, and that was a big mistake, he’d later tell Congress when called to answer questions about the ways that Facebook had been used to manipulate the election campaign. But in the moment, the company denied that it was helping to spread misinformation, while downplaying the extent of the Russian government’s involvement.

Two months after the meeting in Menlo Park, Thiel formally endorsed Trump, becoming the star of the Republican National Convention in Cleveland. Then, in mid-October, just days after the release of the Access Hollywood tape, in which Trump bragged about sexual assault, Thiel donated $1 million to Trump’s campaign. The move helped turn a tide of negative press and added to the coffers of a campaign that would buy a barrage of targeted Facebook advertisements as part of a voter suppression strategy designed to discourage potential Clinton supporters.

After the election, Thiel was feted by Trump’s inner circle and given an office in Trump Tower, along with the latitude to install his allies in the new administration. He was something unique, recalled Steve Bannon, who became CEO of the campaign in August. He praised Thiel for bringing intellectual credibility and seriousness to a campaign that struggled at times to convey either. To Bannon and others on the Trumpist right, Thiel was a hero, a key enabler of Trump’s unexpected win.

To the left, Thiel was uniquely villainous—a Silicon Valley power broker who’d helped hook Americans on a collection of tech services, then used his influence over those services to elect a candidate who promised to ban Muslims from entering the United States and to deport millions of undocumented immigrants. For years, activist groups had been warning of exactly this kind of thing—of the power that Silicon Valley had been accumulating and of the nationalist undercurrents swelling just below a sheen of left-of-center idealism. The far-right ideas had been there for as long as the tech industry had existed—all the way back to the founding of Stanford University. But it had taken Peter Thiel to bring those ideas above the surface, and then to weaponize them.

—

thiel is sometimes portrayed as the tech industry’s token conservative—a view that wildly understates his influence. More than any other Silicon Valley investor or entrepreneur—more so even than Jeff Bezos, or Google founders Larry Page and Sergey Brin, or Zuckerberg himself—he has been responsible for creating the ideology that has come to define Silicon Valley: that technological progress should be pursued relentlessly—with little, if any, regard for potential costs or dangers to society.

Thiel isn’t the richest tech mogul—though he’s almost certainly better at shielding his assets than the average Valley billionaire, having arranged to pay little in taxes on an investment portfolio worth something like $10 billion—but he has been, in many ways, the most influential. His first company, PayPal, pioneered ecommerce and—after being spun out of the company to which Thiel sold it, eBay—is worth nearly $300 billion, as of early 2021. Palantir, his second company, popularized the concept of data mining after 9/11 and paved the way for what critics of the technology industry call surveillance capitalism. More recently, it became a key player in the Trump administration’s immigration and defense projects. The company is worth around $50 billion; Thiel controls it and is its biggest shareholder.

As impressive as this entrepreneurial resume might be, Thiel has been even more influential as an investor and backroom deal maker. He leads the so-called PayPal Mafia, an informal network of interlocking financial and personal relationships that dates back to the late 1990s. This group includes Elon Musk, plus the founders of YouTube, Yelp, and LinkedIn. They would provide the capital to Airbnb, Lyft, Spotify, Stripe, DeepMind—now better known as Google’s world-leading artificial intelligence project—and, of course, to Facebook.

In doing so, Thiel and his friends helped transform what was once a regional business hub—on par with Boston and a few other midsized American metro areas—into the undisputed engine of America’s economy and culture. In 1996, there were no tech companies among the five most valuable traded on U.S. exchanges; in 2021 the entire top five consisted of U.S. tech companies. Today, the most prolific Hollywood studio is Netflix. More Americans get their news from social media, primarily Facebook, than from cable television.

This growth hasn’t been entirely benign. The tech industry, which is still seen by many as a cultural backwater full of socially clumsy but well-meaning nerds, is now an acquisitive and seemingly amoral force, one capable of producing new forms of entertainment, new mediums of communication, and a better way to hail a taxi, but one that is also indifferent to the addiction, radicalization, and economic privation that have come with these advances. The Ubers and Airbnbs America embraced in 2016 had costs. They replaced salaried jobs of taxi drivers and hotel workers with lower-wage, lower-security gigs, and then aggressively thwarted efforts by governments to rein them in.

This shift was part and parcel with Thiel’s other project: an attempt to impose a brand of extreme libertarianism that shifts power from traditional institutions toward startup companies and the billionaires who control them. The Thiel ideology is complicated and, in parts, self-contradictory, and will take many of the pages that follow to explore, but it combines an obsession with technological progress with nationalist politics—a politics that at times has seemingly flirted with white supremacy. Sweetening what might otherwise be a rather sour concoction is Thiel’s personal story— a journey from washout corporate lawyer to dot-com billionaire that he has recounted many times in college lectures, speeches, and in his book, Zero to One. The libertarian success manual also argues that monopolies are good, that monarchies are the most efficient form of government, and that tech founders are godlike. It has sold more than 1.25 million copies worldwide.

For the young people who admire him, watch and rewatch his talks, write social media odes to his genius, and buy his books, Thiel is like Ayn Rand crossed with one of her fictional characters. He is both libertarian philosopher and a builder—Howard Roark with a YouTube following. The most avid acolytes among these fanboys and fangirls become Thiel Fellows; his foundation pays them $100,000 each to drop out of college and start companies. Others have taken jobs within his coterie of advisers, whom he supports financially and who promote and defend him, his friends, and his ideas. These people sometimes talk about a Thielverse, a world with its own laws, its own morality, and, always, a gravitational pull toward the patron. As Thiel has become more powerful, those laws have become the laws of Silicon Valley itself. They increasingly seem to have purchase well beyond it.

Thiel’s worldview has become so influential that it shows up even among his adversaries. Google’s former chair, Eric Schmidt, whom Thiel has skewered as a monopolist and a minister of propaganda, proclaimed himself a big fan of Thiel, praising in particular his campaign of revenge against Gawker Media. That campaign, in which Thiel secretly financed a lawsuit brought by the wrestler Hulk Hogan against the company, drove Gawker out of business in 2016. Thiel’s efforts combined financial pressure and deception—an approach that free-speech advocates have criticized sharply but that Schmidt said left him very impressed. We need people who can challenge orthodoxy, and he is willing and delighted to do so, he said. Schmidt, a liberal who served as an adviser to Hillary Clinton’s campaign, told me he considers Thiel’s support of Trump admirable and part of his contrarian view of the world.

This has been the consensus view on Thiel—that he is a consummate freethinker, a man constitutionally incapable of following the herd. It’s one that Thiel himself has endorsed at times. Maybe I do always have this background program running where I’m trying to think of, ‘O.K., what’s the opposite of what you’re saying?’ and then I’ll try that, he said shortly after the 2016 election. It works surprisingly often.

Even so, Thiel’s role in Trump’s rise to power stunned members of the tech press, as well as some of Thiel’s friends. How, they wondered, could a bookish, gay immigrant from the most liberal part of California, who’d gotten rich in the world’s most globalized industry, who seemed so profoundly committed to the promise of a better future, come to support a reactionary would-be authoritarian? I was transfixed by another question: How had Thiel, who’d arrived in Silicon Valley in the mid-’90s as an unknown, failed financier, come to wield so much power? He was a contrarian, yes, but contrarianism is a methodology, not an ideology. What exactly, I wondered, did Thiel actually believe? And how deeply embedded were those beliefs in Silicon Valley itself?

—

in 2007, when I was a junior reporter with Inc., a small business magazine, I’d sat in Elon Musk’s cubicle at what was then the very modest headquarters of SpaceX, his rocket company. Musk was on the phone, half-listening to a conference call and checking his email at the same time. While I waited for him, I stared at a poster for the movie Thank You for Smoking, based on the novel by Christopher Buckley, son of William F. Buckley and a former speechwriter for George H. W. Bush.

The credits listed on the poster included Musk’s name, along with those of several other PayPal Mafiosi: Mark Woolway, a PayPal vice president, and David Sacks, the company’s COO. Thiel’s name was there, too. By then, he already had a reputation as a bomb thrower, which made the movie, a satire in which the hero is a tobacco industry lobbyist, seem appropriate. Peter Thiel would be a fan of Big Tobacco—or, at least, he’d be totally fine being seen that way.

Later that day, Musk told me the story of his firing from PayPal. He’d been the victim of a secret boardroom plot, masterminded by Thiel while he was on his honeymoon. Musk forgave Thiel eventually. I buried their hatchet, he said, referring to Thiel and his coconspirators. He reached behind his back, miming the removal of a blade from his left scapula. During the interview—and in another much more recent one for this book—Musk managed to affect grace while also making it clear that he does not entirely trust Silicon Valley’s most important venture capitalist.

From that point on, Thiel seemed to hang behind or above or somewhere in the middle of almost every story I reported about the tech industry, and increasingly, many stories beyond it. In 2011, years before progressives started talking about free college, Thiel was warning about rising tuition prices, calling the higher education industry a bubble more troubling than the one in real estate. He helped to jumpstart the backlash against big tech in 2014 when he called Google a monopoly—years before Elizabeth Warren or Bernie Sanders would. And then, of course, came his destruction of Gawker and the election of Trump.

In 2018, I started interviewing former employees, business partners, and other associates—in Silicon Valley, Washington, D.C., and elsewhere—to try to understand how this had happened. Thiel had come to the tech industry with little in the way of money and no engineering ability to speak of. He had no special social graces, and rarely seems to enjoy himself. He speaks haltingly. He is not charismatic, at least not in any traditional sense.

What I learned was eye-opening: Thiel, according to his friends, is brilliant—capable of visionary insights and with an uncanny ability to know exactly how to win. He has the special ability to see life like a chess game—using his friends, his business partners, and his portfolio companies as means to an end. There was a less appealing side to this, of course. The Machiavellian tendencies could make him coldly transactional, to the point, sometimes, of cruelty.

I’d expected Thiel’s close friends to blandly sing his praises. Some did. But the more common reaction to my questions, from Thiel’s friends—people in positions of political power; businesspeople worth many, many millions of dollars; investors able to command the attention of billionaires—was not admiration, exactly. It was fear. They told me they were scared of him. He was that powerful, and he was that vindictive.

During one of these early interviews, a person who has known Thiel for many years, with a successful career in Silicon Valley built in part thanks to associations with Thiel’s network, told me to stop my digital audio recorder. I’m paranoid, he said. Then he proceeded to share a series of anecdotes that portrayed his patron as an incredible investor, with a knack for identifying and nurturing young talent, but who had a ruthlessness that made him uncomfortable.

Then he got personal. Why do you want to write this book? he asked. I mean, aren’t you worried he’ll, like, come after you?

As I write this, a cohort of the Valley’s investors and entrepreneurs—nearly all of them with strong financial and social ties to Thiel—have decided that even the act of reporting critically on Thiel and his friends is no longer acceptable. Balaji Srinivasan, an investor who was one of Thiel’s picks to lead the FDA under Trump—has argued that the media deserves to be destroyed and replaced by something he calls full stack narrative—public relations, in other words. Builders must critique the critiques, he tweeted, using the Randian word for entrepreneur that is favored by Thiel and his friends. Stop the people standing athwart the future yelling stop. It’s your duty.

In certain circles, Thiel’s name itself is a verb. To Peter Thiel a media outlet or a journalist is to bankrupt them, à la Gawker. The suit, which led to a $140 million verdict against a media company that had published a series of unflattering posts that suggested that Thiel was a so-called visionary and disclosed that he is gay, sent an unmistakable message to critics: those who publicly criticize Thiel, or any of his friends, do so at their peril.

Because of his track record for trying to hurt those who’ve attempted to uncover his secrets, many of the more than 150 former employees, business partners, friends, and others with whom I spoke over the course of hundreds of hours of interviews for this book insisted on anonymity. Thiel’s most powerful allies fear him and so, naturally, do some of his former middle-school classmates. I was in communication with Thiel throughout all this—mostly through intermediaries. I’d met him once in 2011, and we met again, in person, in 2019. He insisted that the meeting be off the record. He declined to respond to a lengthy list of fact-checking questions.

My goal, in the pages that follow, is to try to understand a man who has made billions of dollars in part by being inscrutable. I wanted to understand how he’d managed to build such a devoted following and how he’d been able to so consistently make the right bets, even when they seemed crazy. I wanted to understand how somebody so respected and beloved could have gotten that way while also acting ruthlessly. Was Thiel a genius worthy of admiration and study, or a sociopathic nihilist? Could he be both?

These questions matter because they are the same ones we are asking of the big tech companies that the Thielverse gave us. In part because he was instrumental in building it, and in part because so many powerful people came to admire and copy him, much of Silicon Valley is today a reflection of Thiel’s worldview, for better or worse. If we want to understand Zuckerberg or the new monopoly capitalism—or for that matter the Trumpian far-right, which Thiel nurtured secretly too—we need to understand him.

1

FUCK YOU, WORLD

In Foster City, California, in 1980, Peter Thiel and a small group of eighth-grade boys were crammed around a table in a tiny box of a kitchen, their faces hidden behind three-ring binders that had been stood on end for privacy. Their eyes were trained on a map and a set of many-sided dice.

The homes in the San Francisco suburb were modest, packed close together under the hulking San Mateo‒Hayward Bridge. The span connected Silicon Valley—the name for the military research parks and corporate campuses clustered up and down the 101 freeway on the San Francisco Peninsula—to Oakland and the industrial East Bay. Foster City, which had been built in the 1960s after real estate developers drained a marsh by digging a series of narrow lagoons, felt close to neither of these places. It was Levittown-by-the-Sea, full of mostly white, working-class families who’d been drawn to the promise of decent schools, safety, and bayfront property. The children of Foster City, the kids at the kitchen table, weren’t the children of the geniuses who’d built Intel or Hewlett-Packard; their parents were firefighters and schoolteachers and, in the case of Peter Thiel, a mining engineer who went to work in boots and a hard hat.

Thiel’s friends were the nerds, and, being nerds in 1980, they played Dungeons & Dragons on weekend nights. Though commonly understood as a board game, D&D is less about winning and losing than it is about fantasy storytelling. The game called for each boy to create an imaginary character for himself. Wizards, barbarians, druids, and monks were among the many options, each with different skills. Wizards cast spells, barbarians are ferocious in combat, and so on. A final player took on the role of narrator and referee; he was in charge of coming up with an adventure for these characters.

This narrator was known as the dungeon master, and although the role was supposed to rotate, Peter—skinny, brilliant, and painfully, painfully serious—would always try to claim the job for himself. You get to determine the reality, said a man who used to play with him. He liked that quiet control.

Besides being an escape, D&D carried a hint of danger, at least for the boys’ parents. After a seventeen-year-old gamer from Michigan killed himself in 1980, there had been a moral panic among Christian conservatives who worried about the mind-warping potential of a game that encouraged teenagers to playact magic, witchcraft, and other blasphemies. The kids in Foster City laughed this off, but it may have explained why Thiel, whose parents were deeply religious, never once invited them to play at his house.

He told people he was from Cleveland, and he spoke English without an accent, but he was also clearly foreign. He was smart and self-possessed, but he also seemed joyless. I can’t remember him laughing. I never saw him smile, said a friend who knew him back then. "You could tell there was something . . . a nice way of saying it would be structured—about his family."

—

his parents, Klaus and Susanne Thiel, had come to the United States in 1968 from Frankfurt, Germany, where the year before, in October, Peter Andreas Thiel was born. Klaus, then in his early thirties, worked for Arthur G. McKee & Co., an American engineering consultancy, which specialized in the construction of oil refineries, steel plants, and other heavy industries. He’d graduated with the equivalent of a bachelor’s degree from Staatliche Ingenieurschule Dortmund—a forerunner of the modern TU Dortmund University. The following year, 1968, McKee moved the little family to the United States, where Klaus enrolled in a graduate engineering program at Case Western Reserve University.

The move would have been jarring. West Germany, consumed with rebuilding from the war and suspicious of mass social movements, had been late to the counterculture, which had barely hit West Berlin, let alone the country’s financial capital. Frankfurt in the late 1950s and early ’60s was a boomtown, and full of pious white Christians like the Thiels.

Cleveland, by contrast, was pulsing with the currents of free love, Black power, and, worst of all to any good West German, communism. Two years earlier, in 1966, a white-owned bar in Hough, about a mile and a half from the Case Western engineering school, refused to serve a Black man and then posted a sign: No water for n——. A mob formed and attacked the bar, and then moved on to other businesses, looting and setting fires. In the summer of 1968, there was a riot near campus after police and a radical group, the Black Nationalists of New Libya, engaged in a four-hour gun battle and standoff, resulting in seven deaths and days of looting, fires, and militaristic police operations. As if racial tensions could have been further inflamed, reporters later learned that the New Libyans had received a $6,000 redevelopment grant—part of a program created by the city’s newly elected Black mayor, Carl Stokes—which they used to buy their weapons.

Several weeks later, in August, Richard Nixon, then running as a unifying candidate, but who’d implicitly promised to stop Black people, hippies, and sexual nonconformists from overrunning America, accepted the Republican nomination for president. We see cities enveloped in smoke and flame, Nixon said, praising the great majority of Americans, the forgotten Americans, the non-shouters, the non-demonstrators. Thiel’s parents would be fanatical Republicans, and their son would absorb the sentiment, too, coming to identify with these non-shouters, venerating the Nixon era as well as Nixon’s political successor, Ronald Reagan.

The Thiel family, which added a fourth member, Peter’s younger brother, Patrick, in 1971, was stern. Not long after his brother had been born, Peter’s father would explain death to him in terms that—as Thiel relayed them years later—would seem cold, bordering on cruel. Peter, in an existential mode for perhaps the first time, had asked Klaus about a rug in their apartment, which Klaus explained was made out of the hide of a dead cow.

Death happens to all animals. All people, Klaus said. It will happen to me one day. It will happen to you one day.

This moment would be deeply upsetting to the three-year-old boy, and to the man, decades later. Most children—either through the love of their parents or through a happy sort of cognitive dissonance—recover from these early encounters with their own mortality. Thiel never did and would return to the cow—and the brutal, finality of the thing—again and again, even in middle age.

Klaus earned his master’s degree over the next six years, becoming a project manager who oversaw a team of engineers on mine projects. His specialty was the construction of open-pit mines, which involves excavating huge mounds of dirt and rock and then treating them chemically to extract minerals. The family moved frequently, and Klaus traveled even more, often spending weeks at a time on job sites far from home.

After Cleveland, the family chose for their new home a place that couldn’t have been more different than the relatively diverse city where Thiel had spent his early years: apartheid South Africa. Klaus was assigned to work on the construction of a uranium mine in the Namib desert, not far from the town of Swakopmund, in modern-day Namibia.

For Peter, there was a stop at Pridwin, an elite whites-only English prep school in Johannesburg, followed by two years at the Deutsche Grundschule—the public German-language school—in Swakopmund. It was a lonely time. A picture from that era shows a sullen boy in shorts, knickers, and a tie, carrying an adult-sized briefcase. A grade-school classmate in Namibia, Georg Erb, recalled Thiel as smart but withdrawn. He had that distinct, striking, smart look about him, almost like he seemed bored, Erb said. We didn’t really mingle a lot with Peter in school though. We always knew the miners’ kids would not stay long in town.

The work that Klaus had been hired to do was sensitive. South Africa, which administered Namibia as a client state called South West Africa, was already coming under pressure over the apartheid system and had been attempting to create a clandestine nuclear weapons program. The Rössing Mine, which Klaus was building, was a crucial part of that plan—a way for South Africa to survive U.S. attempts to cut it off economically and to defend itself in the event of a Soviet attack. Mineworkers had no illusions about this. Rössing mined Uranium in direct contravention of the United Nations, said Pierre Massyn, a public relations executive who worked there in the early 1980s. It was my job to tell the world that our presence was justified.

To mine uranium in South West Africa was not just to be complicit in the preservation of the apartheid system, it was to exploit that system. Rössing was said to be better than some of the forced labor operations in South Africa itself, but was still known for conditions not far removed from indentured servitude. Migrant workers served under yearlong contracts before being forced to return to their homeland—as the apartheid regime described the semiautonomous Black-only areas. White managers, like the Thiels, had access to a brand-new medical and dental center in Swakopmund and membership in the company country club. Black laborers, including some with families, lived in a dorm in a work-camp near the mine and did not have access to the medical facilities provided to whites. Walking off the job was a criminal offense, and workers who failed to carry their ID card into the mine were routinely thrown in jail for the day.

Uranium mining is, by nature, risky. A report published after the end of apartheid by the Namibia Support Committee, a pro-independence group, described conditions at the mine in grim terms, including an account of a contract laborer on the construction project—the project Klaus’s company was helping to oversee—who said workers had not been told they were building a uranium mine and were thus unaware of the risks of radiation. The only clue had been that white employees would hand out wages from behind glass, seemingly trying to avoid contamination themselves. The report mentioned workers dying like flies, in 1976, while the mine was under construction.

Thiel experienced his two-and-a-half years in southern Africa much differently. He would recall hours spent reading or playing alone in a dusty riverbed behind the family’s house, or playing chess if either Klaus or Susanne was willing.

The Thiels returned to Cleveland the year the mine opened, but they only stayed a year. Their next stop was California, where Klaus had been detailed to the construction of a new gold mine, in Knoxville, a desolate corner of high desert, west of Sacramento. Perhaps having learned their lesson from their time in Cleveland, the Thiels settled down in the kind of idyllic suburb befitting the Reagan revolution: Foster City. They paid $120,000 for a three-bedroom house on Whalers’ Island, which stuck out into an artificial lake like a fist; each of its four small peninsulas had a single road ending with a cul-de-sac.

At Foster City’s Bowditch Middle School, Thiel was placed on a gifted and talented track and told, over and over again, that he was destined for greatness. We were so bought into this sense that you had to get good grades to get into a good college and that your entire happiness depends on that, said Nishanga Bliss, a classmate of Thiel’s. One spring, as a joke, Thiel’s history teacher told the class that no one would be getting an A, then waited a beat while the class recoiled in shocked silence before dropping the punch line. April Fools’!

Among the academically chosen, Peter was widely understood to be the best—the one with the top grades and the highest test scores. And unlike the rest of his social circle, who knew they were nerds and were vaguely ashamed about that fact, Peter didn’t seem to really care. In his friends’ yearbooks, along with the see-you-this-summers and the nice-knowing-yous, Thiel taunted: Maybe you’ll come within one point of me.

In our generation being smart was not cool, said a friend. I remember working hard to hide that I was intelligent. Peter never tried to hide the fact that he was the smartest guy in the room. Everybody, even the nerds, played soccer or baseball and pretended to like it—except Peter.

Chess was his game of choice. In 1972, just before