In the strange relationship between Peter Thiel and Elon Musk

  • Peter Thiel and Elon Musk have worked together for decades, but are poles apart.
  • Thiel and his allies conspired against Musk and replaced him as CEO of PayPal while Musk was on his honeymoon.
  • In a new biography, Max Chafkin shares surprising details about Thiel and Musk’s relationship, through all of its ups and downs.

Peter Thiel and Elon Musk have known each other for decades, ever since they combined their respective online banking companies, Paypal and X, in 2002.

Since then, their relationship has seen many ups and downs and their net worth has grown by billions of dollars. In his new book, “The Contrarian: Peter Thiel and Silicon Valley’s Pursuit of Power,” Max Chafkin takes a closer look at the complicated history of the two men, who are in many ways poles apart.

Here are seven startling details about Musk and Thiel that provide a glimpse into their long and often strained relationship.

1. A source who spoke to the two men said that Musk thinks Thiel is “a sociopath”, and Thiel considers Musk “an impostor”.

Musk and Thiel, although longtime collaborators, are fundamentally opposed: Musk is seen as an outgoing and eccentric risk-taker, and Thiel is known as a cautious introvert.

“While Thiel could be comically secretive even among close friends, Musk was unable to censor himself,” Chafkin wrote. “While Thiel tended to think in terms of limiting risk, Musk was perpetually looking for the big deal.”

2. Musk crashed his $ 1 million McLaren with Thiel in the passenger seat.

Shortly after the PayPal-X merger, Musk and Thiel were on their way to an investor meeting when Musk totaled the car while trying to show off his acceleration, “sending the McLaren flying through the air.” Thiel was not impressed, seeing his business partner as “reckless.”

“The experiment shook Thiel,” wrote Chafkin, “who came to see Musk as reckless; Musk saw Thiel as a money man who cared about technology primarily as a means of making a profit.”

Max Chafkin and The Contrarian book cover

Book cover by the author, Max Chafkin and The Contrarian

Caroline Tompkins and Penguin Press

3. PayPal and X, Elon Musk’s own online banking platform, merged in 2000 because Thiel was “terrified of losing the business.”

While PayPal suffered significant losses in its early years, Musk intervened. He had heard that his competitor could make a deal with Yahoo and did not want X to be ousted. So he convinced Thiel to combine their two companies.

But while Musk would be the CEO, Thiel strategically placed loyal confidants (members of his so-called “Paypal Mafia”) in the top positions.

4. Thiel and his allies conspired and overthrew Musk as CEO of PayPal while on his honeymoon.

As Musk and his wife went on a two-week vacation, Thiel’s worshipers – fed up with what they saw as a never-ending list of disasters caused by Musk’s failed leadership – threatened to resign if the council of administration did not agree to make Thiel CEO.

Musk told Chafkin that he finally decided to forgive Thiel, but hinted that he couldn’t fully trust him anymore.

5. The two billionaires each spent all or part of their childhood in South Africa before landing at Stanford University.

Before taking control of Silicon Valley, the two men had similar roots. Musk was born in South Africa and lived there until college, and Thiel’s family moved there for a few years as a child.

Musk had originally planned to get a doctorate in physics at Stanford, “but gave up to start Zip2, a web-based business directory that functioned as an online version of the yellow pages.” Meanwhile, Thiel studied law, dreaming of an internship at the Supreme Court – but was ultimately rejected after talks with Anthony Kennedy and Antonin Scalia.

6. Musk said Thiel refused to invest in Tesla in part because of his skepticism about climate change.

When Musk was trying to get his electric car business off the ground, Tesla Motors – worth more than $ 800 billion by 2020 – Thiel said no to the investment. “He’s not fully embracing the issue of climate change,” Musk said.

Musk isn’t known to come to terms with rejection well, Chafkin said, and Thiel’s refusal has made their already strained relationship worse.

7. Thiel was instrumental in the success of SpaceX.

Even though their relationship was on the rocks following the PayPal coup and Tesla’s denial of investment, Thiel supported Musk’s aerospace company – albeit reluctantly – in its early days.

Its $ 20 million investment kept the company afloat after a failed third rocket launch in 2008. A month later, SpaceX reached orbit.

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