Peter Thiel on Stagnation, Moralized Technology, and a Divided West

Asked whether he has changed his mind on the question of whether progress is too fast or still not fast enough, Thiel said he had changed his mind to some extent.

He restated the stagnation thesis he began articulating about twenty years ago. He said measuring progress is hard because there are many dimensions, but his basic thesis was that progress slowed from the 1970s on. Progress continued in the world of bits, including computers, the internet, mobile internet and software, but not in the world of atoms. He said many engineering fields tied to atoms, such as mechanical, chemical, aerospace and nuclear engineering, had become unsuccessful fields for people to study, with nuclear engineering already considered a bad idea by the 1980s.

Thiel said he believed this broad slowdown was an important factor behind many things going wrong in society, including political polarization, which he linked to a zero-sum dynamic in which every winner has a loser. He said the internet was an important growth driver in the late 1990s but perhaps not big enough to lift civilization to the next level, and he suggested AI might be bigger than the internet and could reaccelerate growth, with both good and bad consequences.

Thiel said the middle class in the US and Europe expects its children to do better than their parents, and that intergenerational progress, whether economic, material, in health or in softer social dimensions, formed the social compact of modern society. When that progress breaks down, he said, society starts to derange in strange ways.

He said people implicitly assume that the alternative to AI, a zero-growth world with no progress, would be a peaceful social democratic society, and that he does not think this is true. He said the alternative is also far from neutral and that one can never simply turn the clock back.

Asked whether slowing AI could work, Thiel said it could in theory if the whole world cooperated deeply, but that this would require a one-world government with real teeth and force, which he said the classical liberal part of him considers a frying pan into fire, a cure worse than the disease. He also noted that fake global governance, with conferences and empty statements, is possible, and that slowdown might occur in the West but not in China. He referred to a papal encyclical on AI, which he characterized as anti-AI.

Asked about the view that China is behind anti-AI sentiment, Thiel said he is inclined to believe China plays some role but that this is not the main factor. In his view, it is mainly what the West is doing to itself. He compared this with the activist Greta Thunberg, saying he was tempted to joke that she works for the Chinese communists, but that she is more a problem the West has created for itself.

He said the rivalry with China should be taken very seriously, and that it is often too easy to simply blame China for problems.

Thiel said he thinks AI is not a panacea, but that without progress society will keep producing zero-sum conflict and extremes on the left and right. Asked why new technologies are always moralized, he said he thinks society moralizes far too much. He asks what the antonym of good is: the moral antonym is evil and the functional antonym is bad.

He gave examples. A Ferrari is an evil car because it gets poor fuel economy, while a Trabant is a bad car because it barely works and is less good than a golf cart. Thiel said that if you are evil you are at least competent and getting something done. He contrasted Marlowe's 16th-century Faust, a fake scientist who goes straight to hell, with Goethe's version, in which a pact with the devil leads to morally dubious means but the story still ends for the best and the protagonist is redeemed. He said he believes it is better to be good than evil, but that most of the time people and institutions are not even evil or good, just bad. In his view, if 99 percent of businesses, people and leaders are incompetent, that is the problem society should be discussing.

Asked whether he simply has fun being provocative to stimulate debate, Thiel said he does like doing that, but that one particular remark was more deranging than stimulating. He said he always tries to push people.

Asked whether he worries that societies are polarizing and centrist leadership is weakening worldwide, Thiel said he is not a Hegelian, so he does not believe history must move toward a morally good outcome. He said there is a trend against democracy in several countries. He pointed to Germany in the 1920s and 1930s, when two anti-democratic parties, the Nazis and the communists, together won over 50 percent of the vote in the 1932 election, and said once that many people vote for parties that want to get rid of democracy, it is almost too late.

Thiel said that taking the problem seriously is the right approach, but that solutions also matter. He said he often makes the point that the first step is to talk about a problem, even without a comprehensive solution. Asked about the AfD, he said he was hesitant to speak too much about German politics, but that the party reflects a failure of the centrist parties to find an economic future for Germany that is inclusive and works for society as a whole. He said he does not think the AfD has great solutions and does not think either the extreme left or extreme right knows how to balance the budget.

On foreign policy, Thiel said the AfD's concept is basically pro-Putin, pro-China, anti-Israel, and in parts anti-Semitic. He said it is important to debate all three of those issues, and that a reasonable debate about Ukraine, China and Israel is possible, but that he thinks the AfD is wrong on all three.

Asked whether a disruption is needed again as it was in 2016, Thiel said he does not want a democratic socialist disruption, which seems catastrophic. He said he worries the establishment Democratic Party has failed as badly as the establishment Republicans, so the US may be disrupted and could shift very far to the left. He said democratic socialists in America are a real option and a real danger.

He described the history of the Democratic Socialists of America. He said it was founded in 1982 as a fusion of fringe socialist groups with a paid membership of around 5,000. In the 2016 campaign, he said, a legacy of the Bernie Sanders candidacy was that membership grew from 5,000 to 50,000 and the median age fell from 66 to 33, turning an old socialist movement into a young one with energy and charisma.

Thiel said he is always hesitant to overrate his role in such matters. He said he has a soft spot for smart people and found Vance thoughtful, open-minded and charismatic. Vance worked for Mythril, a venture fund Thiel helped start, and wanted to write a book on the side, which Thiel encouraged; it became a bestseller in 2016. Thiel said he helped Vance financially when Vance ran for Senate in 2022.

Asked who would be the better Republican candidate for the next election between JD Vance and Marco Rubio, Thiel said he is still a Vance partisan but worries that it will be very hard for either candidate to win. He said the right question is who the Democratic candidate will be, and whether a centrist or a DSA candidate would give Democrats a better chance. He said a center-left candidate is probably better in a close election, but if the Republicans are wiped out in the midterms this fall, Democrats will think they will win no matter what in 2028, and so there may be less of a firewall against a democratic socialist.

Thiel said he thinks Democrats will do well enough in the midterms, about a month and a half away, that they will be indifferent to a center-left versus far-left presidential candidate, and then the field is completely open. He said he once debated Francis Fukuyama, who does not fully believe his own end-of-history theories anymore, and that when Thiel said there was a good chance a democratic socialist would win in 2028, Fukuyama responded with absolute confidence that it could never happen.

Asked whether a democratic socialist win is therefore the most likely outcome from today's perspective, Thiel said it is not the most likely but he would put it at about a 50 percent chance, which he called pretty high.

Thiel framed the macroeconomic problem as follows: the US and Europe have very large welfare states and taxes that feel high to him, and very big deficits. He said the deficits might be sustainable at 0 percent interest rates, but interest rates are no longer zero, so there is a compounding, runaway deficit problem.

He said there are basically three choices: massively cut spending, which he called the Milei answer; massively raise taxes, which he said would basically shut down societies and all growth; or keep running deficits and kick the can down the road. He said that for close to 20 years the answer has been the third option, with borrowing rising since the 2008 crisis, but he believes that is close to ending. He suggested that societies would then be pushed toward either socialist levels of taxation or very tough austerity. He added that the best idea Merz has, in his view, is simply to borrow more.

Thiel compared the question of AI in 2026 with two historical cases: the Concorde, which he said Europe caught up with and led, and Minitel, a 1990s French program in which the internet was supposed to be French but Europe ended up behind and dug itself into a deeper ditch. His assessment, he said, is that Europe is further behind on AI than it was with Minitel.

He said the more important question is why this is happening and how likely it is that Europe can change it, which he said is always overdetermined and harder to answer. He noted a common claim in Germany that a fear of failure makes people risk averse, but said he wants to push back on the dimension of a fear of success, in which founders do not scale successful companies to the extreme degree of figures like Elon Musk or Mark Zuckerberg.

The interviewer noted that Thiel said he tried for decades to get Germany out of his mind intellectually and did quite well, but did not get it out of his heart. Asked why, Thiel said it would be stranger if there were no such tie. He was born in Frankfurt in 1967 and left Germany at one year old, so he has no memories of it, but he grew up between a German-speaking home and English-speaking schools in America.

He said it is understandable that things have gone somewhat wrong in Germany, but it is also very important to find a way to turn the country around, since it is at the heart of Europe and Europe is still at the core of Western civilization. Asked what he loves about Germany, he said he is always bad at answering that, and that it is part of who he is.

Asked whether the shared European background with Alex Karp and Max Levchin played a role in their business and friendship, Thiel said it is probably part of it, but he does not want to overdo it. He said many tech founders can be seen as both insiders and outsiders. He said he and Karp were both insiders who went to Stanford Law School, though Thiel said he was in some ways an outsider to America, and that Karp is Jewish, which gives him a bit of an outsider dimension.

Thiel described Levchin as a super-achieving straight-A student and an incredibly charismatic person who left Ukraine at 16 and grew up in a poor part of Chicago, with an incredible drive. He said the outsider-insider combination is what he sees in founders, that people always exaggerate the outsider part, and that he grew up in Silicon Valley, which very few people did.

Asked whether he has any areas of passion without any professional or pragmatic rationale, Thiel said he probably still plays far too much chess on the internet. He said he was a scholastic chess player and calls it a very beautiful, somewhat dangerously addictive game. He said it is probably not equivalent to all of reality, though at various points in his teenage years of delusion he liked to say that if you did not play chess you did not understand reality, which he now thinks is probably too extreme a thing to say.

He said many political questions are important, but they frustratingly feel largely outside of our power, and that it might be healthier and more profitable in many ways not to think about them and to focus on a particular business.

Asked for the most optimistic, visionary case about longevity, Thiel said eternal life is not clearly something that should be impossible and that there are not clearly any natural limits. He said people have grown more pessimistic because certain things, such as cancer, have been very hard to cure. He recalled that Nixon declared war on cancer in 1971 and said it would be cured in five years, and that 55 years later there has been some progress but it is very far from enough.

He described biological processes as seemingly irreversible and information and computational processes as fundamentally reversible. If biology could be understood as an information science, he said, in theory one could find a way to traverse these processes, and computers can live forever. He said he has a more physical, Christian-informed view and would not find it acceptable to be uploaded into a computer program that simulated him, because he does not think that would be him.

Asked whether eternal life would really be desirable or would be extremely boring because everything is unlimited, Thiel said he thinks the answer is that it is better than the alternative, and that he does not think he would be bored. He also said he keeps investing in biotech areas, which he said is surprisingly difficult for various reasons.

If he focused on one area, he said, it would be trying to do something about dementia, finding a way to slow or reverse declines in people's brains. He said that is the area he would want to tackle in the years ahead.