Free with a sign-in.
The best 17 min of 66
Peter Thiel: The AI Crisis, Europe’s Decline & the Battle for America
Peter Thiel argues that AI could restart growth after decades of stagnation, while Europe risks falling far behind in the AI race.
MMMD MEETS · Mathias Döpfner
- Peter Thiel is a Silicon Valley investor and PayPal cofounder.
The best minutes
- 0:14AI could end decades of technological stagnationPro pick 3 min
- 3:01Slowing AI could leave societies stagnant and empower ChinaPro pick 7 min
- 39:30Europe’s AI gap reflects a deeper weakness in company building7 min
Every moment plays free. PRO marks a write-up that's in Pro.
Also worth watching
Skip the remaining German party debate, the Trump and U.S. election discussion, and the personal conversation about German roots and chess.
Full analysis · 6 min read
Real Alpha · Nov 8
Peter Thiel says AI could reaccelerate growth after 1970s slowdown
- Thiel says progress slowed since the 1970s, while AI could potentially restart growth.
- That possibility is not an economy-wide productivity result, and his company example is narrow.
- Leaders should measure realized gains and watch whether growth spreads beyond AI adopters.
Free with an account
Read the rest of the analysis
6 sections, the 5 other voices it tests Thiel against, and what it means for you. Every episode we cut gets one.
Check your inbox
We sent a link to your address. Click it to finish signing up. Not there in a minute? Look in spam.
or
Signed up before? The same buttons sign you in. The episode, its moments and the transcript stay free.
Thiel sees AI reopening a decades-long growth gap
Thiel’s repeatable fact is a period, not a forecast. He said progress had slowed since the 1970s, especially in engineering tied to physical things, while software and the internet advanced.
But a historical diagnosis does not establish that today’s AI will lift output across the economy. For example, he contrasted progress in computers, mobile internet and software with a weaker record in engineering the physical world.
The internet drove growth in the late 1990s, he said, but perhaps not enough to take civilization to another level. The episode gives no productivity series, adoption rate or date by which AI must prove his thesis.
The hedge matters because the interview moves from a proposed mechanism to a macroeconomic hope. Computing could accelerate discovery, but the transcript names no sector, measured gain or causal path from models to national output.
“I think perhaps AI is bigger than the internet and at least has the potential to re-accelerate growth”
Our read
The slowdown is Thiel’s explanatory frame, not a measured forecast for AI. The distinction is between a plausible growth mechanism and a demonstrated macroeconomic result.
He links stagnation to zero-sum politics
Thiel links slow growth to political polarization because a society with a loser for every winner feels zero-sum. He also said the intergenerational compact weakens when people stop expecting their children to do better.
That makes the political case depend on perceived broad improvement, not just national output. In October’s Possible, Reid Hoffman also tied AI anxiety to fear of a worse future and disputes over who gains.
That comparison sharpens the test for Thiel’s case. Growth could ease zero-sum politics only if people feel the gains in ordinary life.
Our read
Thiel connects stagnation to political strain, but the episode does not show that AI growth would be broadly shared. Distribution belongs in the growth test, not after it.
Thiel warns uneven restraint could leave the West behind
Thiel said he did not think the probabilities of AI escaping control were very high. But he also said even five or 10 percent would be troubling.
The host had cited six large language models that put extinction risk between one and 10 percent. Thiel accepted that possibility for the sake of argument, not as his own estimate.
His objection is not that catastrophic risk should be ignored. It is that slowing progress carries social and geopolitical costs, too. Thiel said coordinated restraint would require a one-world government with real teeth and force.
He viewed that solution as a cure worse than the disease. He also warned Western limits might not bind China, while saying he was inclined to believe claims of Chinese anti-AI messaging. He added that he thought Western sentiment was mainly self-generated.
In October’s The Cognitive Revolution, GovAI fellow Alan Chan said takeover is harder than a rogue-agent incident suggests. That comparison cautions against turning a possible tail risk into a settled probability.
On Sources in October, Sundar Pichai described sandboxing, live monitoring and customer telemetry as safeguards. Those measures suggest ways to manage deployment risk without treating slower progress as the only option.
“a cure that's worse than the disease”
Alan Chan · The Cognitive Revolution · Oct 14Why an AI takeover is much harder than the rogue-agent panic suggests
Sundar Pichai · Sources · Oct 21Google pairs model access limits with runtime safeguards
Our read
Thiel identifies a real tension between potential harm and the cost of stopping progress. His own probability caveat and his account of Chinese messaging both call for careful calibration, not certainty.
Corporate urgency is his evidence of AI’s arrival
Thiel pointed to Palantir as evidence that companies are moving. He said sales to US corporations had accelerated as customers felt urgency to transform with AI, while Europe had less of that urgency.
Thiel has been involved with Palantir for many years, so this is an interested company example, not independent industry evidence. The episode gives no sales figures, customer counts or comparable European data.
David Friedberg said in October’s All-In that AI advances fastest where guesses can be tested on a computer in seconds, in parallel. He said applications relying on the physical world get less acceleration from that loop.
That distinction limits what Palantir’s example can establish. Adoption in software workflows does not prove equivalent gains in physical industries or economy-wide productivity.
David Friedberg · All-In · Oct 10Math proofs fall fastest where the whole test loop runs in software
Our read
The Palantir example supports the view that some customers feel pressure to act. It cannot, by itself, establish broad productivity growth or Europe’s position across industries.
His Germany comparison points to company building
Thiel’s sharpest Europe evidence is about who built wealth. Of Germany’s 50 wealthiest people, he said, 20 were Gen X or younger, and all 20 had inherited their wealth.
His US comparison was nine self-made people among 12 Gen X or younger in the country’s 50 wealthiest. He said no one in the younger German group had built a large, new, scalable company.
That is a striking contrast, but it is a narrow sample of wealthy individuals. Thiel said he looked up the statistic without naming its source, and it does not establish why German company building weakened.
For instance, he contrasted Concorde, where Europe caught up in supersonic aviation, with France’s Minitel effort to make the internet French. He said the latter left Europe in a deeper ditch, and judged Europe further behind in AI than Minitel was.
The examples do not make a simple prescription. Thiel called Concorde “not a free market thing,” and the episode does not establish that the same approach would work for AI.
Our read
Thiel’s concern is not simply whether Europe invents, but whether it builds new companies that create wealth at scale. His wealth comparison raises that question without answering why the gap exists.
The broad-growth promise still needs proof
Thiel’s case asks leaders to compare AI’s risks with the cost of stagnation. But he offers no target for how much growth AI must generate, or when it must arrive.
In October’s The Mishal Husain Show, Daron Acemoglu said investment should focus on AI that makes workers more productive. That gives executives a practical test of Thiel’s broad-growth hope, rather than assuming frontier progress will benefit the wider economy.
For founders, the distinction affects what to build and what to measure. A deployment that improves one team’s output is useful evidence, but not proof of company-wide gains or a wider growth rebound.
A board discussion should separate adoption from results, and results from who receives them. Otherwise, growth can describe very different outcomes for workers, customers and owners.
Our read
Thiel makes a case for taking AI’s upside seriously, not for treating it as established. Measure realized productivity and distribution while keeping deployment risks visible.
What it means for you
- Set a productivity baseline. Before expanding an AI workflow, record current time, output and error rates. Compare those measures after deployment instead of treating usage as proof of gains.
- Separate digital from physical. Group use cases by how quickly each result can be checked. The episode’s argument and Friedberg’s comparison suggest gains in fast digital loops may not transfer to physical work.
- Test who benefits. Track whether improvements reach workers, customers or only a narrow group. Thiel’s political case depends on growth being broad enough to change zero-sum expectations.
- Audit the scaling path. For European teams, examine whether promising projects can become large businesses. Thiel’s Germany comparison focuses on company building and scale, not invention alone.
What to watch
- Whether AI adoption produces measurable productivity beyond reported corporate urgency.
- Whether Europe builds and scales new AI companies, rather than relying only on catch-up projects.
- Whether Western safeguards manage risks without slowing progress more than leaders intend.
Send this to the strategy lead weighing AI growth against deployment risk.
Watch the minute where Thiel dates the slowdown to the 1970s
Written by Real Alpha from the episode's transcript and the other moments it links, then checked against the transcript. Quotes are the speaker's exact words.
Minute by minute
A Pro write-up, open to you here. Try Pro free for 7 days
A Pro write-up. The minute by minute is in Real Alpha Pro; the episode, its moments and the transcript stay free.
Read it with Pro, 7 days free- 0:49AI could end decades of stagnation
Thiel says progress slowed broadly from the 1970s, with advances in software and the internet but less progress in fields tied to the physical world. He argues that the internet was not enough to lift all of civilization to a new level, while AI could reaccelerate growth.
- 3:56AI risks do not settle the debate
Thiel says the chance of AI escaping human control may be low, but even a 5% or 10% risk would be serious; he notes that six leading LLMs recently estimated extinction risk at between 1% and 10%. He argues that a nonzero risk does not mean progress should always slow, since stagnation can destabilize society and Western restraint could strengthen China if China keeps advancing.
- 10:03Thiel says Europe trails in AI
Thiel says the United States is where AI is happening, China is a fast follower and Europe is extremely far behind. He points to greater urgency among U.S. corporations, including Palantir customers, to transform their businesses. He links democratic strain to the absence of a broad growth story and argues that technologies can be used for good or bad rather than being inherently moral.
- 15:48Thiel clarifies his democracy essay
Thiel says his 2009 line that freedom and democracy were incompatible was corrected two weeks later: he meant politics should be less intense, not that votes should be taken away or democracy abolished. He says the article argued against libertarians who put too much faith in changing the world by winning elections.
- 18:54Thiel warns about political extremes
Thiel says Germany’s Nazis and communists together won over 50% of the vote in 1932, and sees today’s strength of left- and right-wing extremes as a serious problem. He argues that centrist parties have failed to offer an inclusive economic future, while young people face concerns such as high rents and difficulty getting ahead. He says the AfD is wrong on Ukraine, China and Israel, and sees no strong economic solutions from either extreme.
- 25:01Thiel says Trump exposed establishment failures
Thiel says Trump’s 2016 rise reflected establishment failures on growth, globalization and U.S. involvement in the Middle East. He criticizes infighting in Trump’s first administration and says the second overcorrected with loyalty tests and less capable loyalists. He worries that the Democratic establishment has failed too, potentially opening the way for a shift far to the left.
- 30:22Thiel backs Vance as 2028 looms
Thiel says he supported Vance because he found him thoughtful, open-minded and charismatic, encouraged him to write a book, and helped fund his 2022 Senate campaign. He says he remains a Vance partisan but thinks the Democratic candidate may matter more in 2028. He puts the chance of a Democratic socialist winning at 50%.
- 33:48Western economies face hard choices
Thiel sees Argentina’s long period of subpar growth as a warning for the West and says it is an open question whether Milei can turn the country around. He says governments face a choice between major spending cuts, much higher taxes or continued borrowing, which he says has been the pattern since 2008. He expects drift to continue because replacements for current leaders lack answers.
- 39:30Europe can lead or deepen its AI gap
Thiel says Europe should be a reliable U.S. ally, while also becoming more functional and building industries of its own where it can lead. He cites Concorde as an example of Europe catching up and leading, and France’s Minitel as a failed attempt to build a separate internet. He judges Europe’s AI position to be worse than Minitel’s.
- 43:20Germany needs scalable companies
Thiel says Germany may have a fear of success as well as a fear of failure, arguing that businesses that work often do not scale far enough. Citing the 50 wealthiest people in each country, he says 9 of the 12 U.S. members born in 1965 or later made their own money, while all 20 in Germany inherited theirs. He says Germany’s ability to build new businesses has broken down since 1995.
- 47:24Thiel describes an insider-outsider identity
Thiel says he left Germany at one, spoke German at home and had grandparents there, and calls his attachment to the country part of who he is. He describes himself and Alex Karp as both insiders and outsiders, and says Max Levchin’s Ukrainian background and upbringing in a poor part of Chicago shaped a similar mix.
- 51:35Thiel values broad, independent thinking
Thiel rejects contrarianism for its own sake, saying he tries to think for himself. He credits interests across history, politics, economics, science fiction and psychology with helping him look for a bigger picture. He also says he still plays chess online, a game he finds beautiful and potentially addictive.
- 56:05Children widen Thiel’s time horizon
Thiel says having four young children changes how far ahead he thinks: his oldest daughter will be 81 in 2100. He sees longevity research as part of scientific progress and says medicine should keep trying to cure diseases such as Alzheimer’s. He favors a physical account of identity over uploading a simulated mind, and says he most wants to address dementia and brain decline.
- 1:04:02Thiel says many fear the Antichrist is near
Asked for a truth few people share, Thiel says his view that the Antichrist is near seemed unconventional when he began discussing it. He now thinks many people share underlying fears about totalitarianism, even if they dismiss the idea as crazy.
Published Sep 24, 2026.
Transcript · 41 min read
MD MEETS, hosted by Mathias Döpfner, with Peter Thiel.
Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.
Welcome to Berlin! Thank you!
“And then I think perhaps AI is bigger than the internet and at least has the potential to re-accelerate growth with all the good and bad things that come with that.”
“Because if you do nothing, if there is no progress on any dimension, I don't think our societies work at all.”
Read the whole transcript
too easy to simply blame it on China. Yeah. But then why is it so negative at the moment in the U.S.? I mean, I really have the feeling that if we are talking to our European colleagues about AI, as long as they are unable to learn and participate in the journey, they're actually pretty positive. In America, it's very different. People are raising posters and are protesting against AI. So, it is almost a very anti-cliché of being American. Usually, America is perceived to be pro-technology, pro-progress. And in that case, it is a bit the other way around. The next election campaign could be, to a degree, even a campaign, which political party is protecting
their people better against AI. Why is there such an anti-AI sentiment in America? Do they know more about it than the Europeans? Or has the American mentality changed? What's happening? Well, let me do the pro-U.S. version. Okay. That this is where – the U.S. is the place where AI is happening. And then Europe is – we can debate how far behind it is. In my telling, it's extremely far behind. Yeah. It's extremely hard to catch up. It's obviously still a very fluid situation. But to first order, there's a lot happening in the U.S. China is a fast follower. And then Europe is extremely far behind.
So it's not felt in Europe. It's not even felt on the level of corporations. If I look at something like one of the businesses I've been involved with for many years, Palantir, the sales to U.S. corporations have accelerated tremendously in the last few years because there's an urgency to get ahead of the curve and figure out how companies need to be transformed in this new AI. And there's still much, much less of that sense of urgency. in Europe, where, you know, there's still this inertia, we can wait, we can, you know, don't do tomorrow what you can say for the day after. Do you think in the long run, is AI going to be good for democracy or bad?
It is, that's a very big, very big question. I think the, you know, I think the big the place where our democracies are in trouble, and I always prefer saying constitutional republics or our broadly liberal societies, broadly free societies are in trouble, is that there's a way that we don't have a broad growth story of the future. There's a sense in which people don't think things are getting better. Things have become more zero-sum. I don't think AI is the panacea for everything. But I think without that, you're just going to continue to have these sort of zero-sum parties on the extreme right and left game ground. Should we perhaps stop to discuss whether AI is positive or negative? I mean, I think it is almost like a knife. With a knife, you can prepare the most wonderful food and have a great dinner, and with a knife you can kill a person. So if you don't want killings, you criticize murderer, but you don't criticize or you don't bend the knife. So why do we always moralize new technologies? I would say technologies are just neutral. You can use them for good and for bad causes, and it depends on us what we human beings that do you with it. Yeah, so I'm going to get in trouble for what I'm about to say, but
I think we moralize way too much. And there's always a question I like to ask, what is the antonym of good? And the moral antonym is evil. The functional antonym is bad. A Ferrari is an evil car because it doesn't get many miles per gallon. A Trabi is a bad car. It's less good than a golf cart, you know, the former East German car. And so, you know, if you're evil, you're at least competent. And if you're evil, you're not bad. And therefore, maybe you're actually kind of good because you're at least getting something done. If you contrast the Faust books of Marlowe versus Goethe. In Marlowe's Faust, that was the 16th century Faust story, Faust is a fake scientist. He's sort of like a magician, you know, sort of a fake alchemist, and it's bad science. And he goes straight to hell. In Goethe's Faust, he has a pact with the devil, and he sort of gets his knowledge by morally dubious means. But it's still always works out more for the best and Goethe's Faust gets redeemed so I think it's better to be good than evil I want to be very clear but perhaps I prefer Goethe's Faust to Marlow's Faust and then the moral question in our society is we have all these good versus evil debates and we're full of badness
most of the time they're not even evil They're not even good. They're just merely bad. And so if you're in a world where 99% of the businesses, companies, people, political leaders, business leaders are totally incompetent, that's the problem we should actually be talking about. Very few people would say about you that you are incompetent, but there are some people in a very polarized discussion that say, you are evil. And if it is about your being evil, it is about democracy. And some people are portraying you as the anti-democrat, and they are basically all referring to one quote from 2009, where you wrote, I stopped believing that freedom and democracy are compatible.
Can you explain why you wrote it, what you mean with it, and what your thinking today is about? And it's always very dangerous to write things. Writing is a very dangerous activity. I know what you're talking about. You know, the context was it was this article I quickly typed out one night. I sent it to one of my colleagues. I asked him to write anything controversial in it that I should not have written. And no, nothing controversial in here at all. And then the meta-level post-mortem I had was the fact that I asked someone for a second opinion told me that I had probably needed to be more careful in my wording.
I did issue a correction two weeks later. So you can still go to the website where, you know, I make it very clear that I'm not, I don't think anyone's votes are going to be taken away. I don't think the democracy will go anywhere. And that I was, what I was arguing for was a certain depoliticization, a deintensification of politics. The original article occurred in this sort of libertarian Cato online journal, and the point of it was directed against libertarians who put too much faith in politics and wanted to change things, change the world by winning elections and doing things like that. And, you know, I thought, you know, these pure libertarian, pure classical liberal ideas, I believe in them. I don't think they're easy to win in a democracy. I didn't say anything that Montesquieu or, you know, John Stuart Mill or any of these people wouldn't have said. But it was not, you know, it's not a claim that democracy is going to go away or anything like that.
But isn't it that sometimes you simply have fun in being provocative and stimulate a debate? I do like doing that. I don't think that one—I think that one is more deranging than stimulating. So my really— But I always try to push people. Yeah, but you care a lot about democracy. So you'd say you're not only not an anti-democrat, you're actually a person who thinks about how to strengthen, how to save democracy. Are you worried that we are going a wrong path these days, polarizing of societies and weaker and weaker centrist leadership all around the world? Autocratic systems are basically achieving their goals pretty successfully. An economy in China that is a kind of authoritarian state economy is prospering. So, if we simply draw a line at the moment, democracy is not doing particularly well.
Sure. But look, I'm not a Hegelian. So we can always say there's a way where history seems to be going, there's a certain trend, and then it's not morally good. In Hegel, whatever happens, happens for the best. And so, yeah, I think there is a trend against democracy. There's a trend where these things are in some trouble. And what went wrong in Germany in the 1920s and 30s, it was two anti-democratic parties. It was the Nazis and the communists. In the 1932 election, those two parties got over 50% of the vote. And once over 50% of the people vote for parties that want to get rid of the democracy, it's almost too late.
you're really in trouble. We have a situation in Germany these days where you also have very strong parties on the very left and on the very right. In Berlin, the socialists won the election and Sachsen-Anhalt, a smaller state, the very right-wing party, AfD, won the... last election in a landslide, and more and more is shifting from the center to the extremes. Do you have any ideas what could be done in order to reverse that trend? Or is it a trend that cannot be reversed? I don't know what you would do if you ran for office. I don't think I would be a good politician. It's not what I would want to do. I don't have great advice for the political leaders, the centrist political leaders in these countries. I think they systematically underestimate the scale of the problem. In Great Britain, there have been seven prime ministers in the last 10 years. Nobody's had a plan for how to turn their societies around. They all think, you know, once I become prime minister, that's all I have to do. I have to figure out this complicated internal intraparty, you know, complicated game to become prime minister.
And once I do that, I can figure out all these problems. And then there are these deep structural problems. The technological stagnationist perspective I have is that there's not been enough progress. The societies have been fraying. The intergenerational compact has broken down. And this is what these things are reflections of. I don't think the extreme parties will solve things, but we need to take it seriously. So the Linke in the Berlin elections had got 25% of the vote. Among 16 to 24-year-old voters, it got 47%. And that's, you know, eventually the young people are the people, you know, who will be deciding things in your society. That's a very bad trend.
And, you know, I'm making the pro-Linka argument because you will not accuse me of being a sympathizer of the Linka or a communist or anything like that. So what's the pro-argument? Tell me. Well, the pro-argument is you have to at least take the issues the young people are talking about seriously. So there's some problem in Berlin where the rents are too high and it's impossible to build houses or, you know, the young generation finds it very hard to get ahead. It finds it very hard to be successful. There's a way that Germany is at Europe and some of the United States, these are gerontocracies.
Their societies run for old people. To take the problem seriously is definitely the right approach, but it also depends on the solutions. And the solutions that the linker proposes here is to solve the rent problem by nationalizing real estate companies and to basically motivate society very much driven by anti-Semitism, pro-Islamism, And now it seems, if we look to the images of the party in the election line, also with the help of organized crimes, clan chiefs. So I think that's where taking things seriously ends. Well, they don't have solutions, but all they need to do to win is that they can say, you know, and this is always something I often say too, is, you know, when you ask me what to do about the tech stagnation, my simplistic answer is always, well, I don't have a comprehensive solution, but the first step is you have to talk about it.
And so, you know, I don't know the exact debate in Berlin, but I could imagine the link is saying, okay, we don't know if our solutions. exactly work, but we're at least talking about the problems. Nobody else is talking about them. So what's your take on the other side of the political spectrum, the AfD, Alternative für Deutschland, the far right-wing party? Is that an alternative for conservatism, or are you worried about that development? How do you see it? Again, I'm hesitant to speak too much to the specifics of German politics, but yes, I think it reflects these failures of the centrist parties. It reflects a failure to find an economic future for Germany that somehow is inclusive and broad and works for the society as a whole.
I don't think they have great solutions. I don't think they know how to balance the budget, either the parties of the extreme left or extreme right. With the extreme right, there is another issue. It is about foreign policy. The foreign policy concept is basically pro-Putin, pro-China, understanding anti-Israelism or being anti-Israel, being anti-Semitic in parts. Well, my paradoxical thing I told you earlier today is that I think it's important for us to have debates about all three of those. And so I think there can be a reasonable debate about Ukraine, a reasonable debate about China, a reasonable debate about Israel.
And at the same time, somehow, I do think the AFD is wrong on all three. And that's, you can't be wrong on all three. let's switch to the united states you were uh in 2016 uh supporting donald trump um 10 years later uh how would you analyze his uh achievements how would you analyze his failures uh where do you stand today with regards to the last two years and then the first term of the president um man, my facile answer is you should ask me in 10 years or so, and we'll see in 10 years how it all works out. I still think that in many ways, it reflected a failure of the establishment to deal with these long-term problems the U.S. had with these growth problems, with some of the challenges of globalization, you know, with the endless entanglements the U.S. had in the Middle East that had not really worked all that well. And then, of course, there are all these things that, you know, you wish they had appointed more competent people. I think the two administrations kind of made opposite mistakes. You know, the first administration brought in all these people who couldn't agree and it was just all this internal fighting. The second administration, I think, had all these, they overcorrected for the mistake of the first term
with all these loyalty tests. You got sort of, you know, an administration staffed by not very smart, uh, but very loyal people. And so, yeah, so there are all sorts of ways it's, um, it's, uh, it can be criticized. I don't, um, but, but it also, again, it reflected a way that, uh, that, uh, things, things had reached a certain exhaustion on, um, and certainly on the Republican side. Uh, and I, I worry in the United States that, um, the kind of exhaustion with the Republican establishment that happened with the Bush family that happened in 2016. We're about to see with the sort of Clinton-Obama center-left establishment.
And the last three elections, in 2016, Trump, the sort of anti-establishment person, won the Republican primary. Hillary, the establishment person, barely beat Bernie Sanders. And then again, the establishment won in 2020 and 24. I don't know if they'll be able to do it in 28. And the Democratic Party is the more important party. That is the establishment party in the US. The Republican Party is always a little bit the anti-establishment one. So if the democratic socialists take over the democratic party, that's a much bigger deal. And that is like, I don't know, the end of America. I remember very well a lunch that we had in 2016 when I asked you, why do you support Trump?
And you basically said, because the existing party and the existing leadership is so dysfunctional, it just needs disruption. And that was an interesting thing that I could understand very well. Would you say now, 10 years later, we need disruption again? I don't want disruption of the democratic socialist variety. That seems catastrophic. But again, if I do it not morally, not normatively, just on a descriptive level, I worry that the establishment Democratic Party has failed as badly as the establishment Republicans. And so we are going to get this disruption. And there is a risk that the U.S. will shift very far to the left.
That's the real disruption we're going to get. So you belong to those who say— I don't think it's good. The Democratic Socialists of America are a real option. They are a real danger. You once said it's the most kind of energetic and, in a way, the most successful political movement these days. And so it's young. So it's like pop culture, by the way. The history on it was—I looked this up the other day, but it was—the Democratic Socialists got created in 1982 as a sort of fusion of these very fringe socialist groups and sort of a members-paid thing. It was like 5,000 people. It was a very small fringe thing.
And in the 2016 campaign, a legacy of the Bernie Sanders candidacy is the membership of the Democratic Socialists, of the sort of cadre of the vanguard, ballooned from 5,000 to 50,000. The median age went from 66 to 33. And so it was this old socialist people thing to a young revolutionary thing. And yes, it has a certain amount of energy. It has a certain amount of charisma. You know, again, the established Democrats, they're all lame. They can't say anything. I mean, it's the same problem with the SPD, CDU people in Germany. You were an early supporter of J.D. Vance. You worked with him. You basically saw something in him that other people didn't see then.
Can you describe what it was and why you supported him? uh, I, I always, I'm always hesitant to overrate, you know, overrate my, my role in these things. I, um, I probably always have a very soft spot for smart people. So I thought he was thoughtful, open-minded, um, charismatic. And, uh, you know, he was, he was working for, uh, one of the venture funds I had helped start called Mithril and then wanted to write this book on the side. And I encouraged him to do that. It became this bestseller in 2016. And I helped him out financially when he ran for Senate in 2022. But I think I'm always hesitant to answer this question because I think it just detracts from his achievement in many ways.
is. Now, the Republicans will make a decision sooner or later the names about the potential candidates that are heard most often are J.D. Vance and Marco Rubio. Who do you think would be the better candidate in order to increase the likelihood that the Republicans would win the next election? Well, I'm still advanced partisan. I worry that it will be very hard for either candidate to win. And so, I don't know. My pessimistic thought is that that's the wrong question. So the right question would be... Who's going to be the Democratic candidate? That's the right question. And would it be a center-left centrist candidate of the Democrats who would provide them with the better chances, or would it be a DSA candidate?
Well, obviously, in a close election, a center-left candidate is probably better. If it's not a close election, it probably doesn't matter. And I think there's a decent chance that it will not even be close. If the Republicans get wiped out in the midterms this fall, then the Democrats will think that they will win no matter what in 2028. And therefore, there probably will not be as strong a firewall against – you won't pull out all the stops to prevent a Democratic socialist from winning. So I think the Democrats will do well enough in the midterms, in a month and a half, that they will be indifferent to a center-left versus far-left presidential candidate, and then it's a completely open field, completely open question.
And I had this discussion debate with Fukuyama, you know, the end of history, and he doesn't fully believe his theories anymore. But when I told him that there was a good chance democratic socialists would win in 2028, he responded with absolute confidence, no way, can never happen. And I don't think history is stuff like that. So you think from today's perspective, that's the most likely outcome? Not the most likely, but let's say it's a 50% chance. That's pretty high. That's pretty high. You are a fan of Millet because he's a disruptor, I assume. Can you describe a little bit what we, what Western societies, what America, but also what Europe could and should learn from Javier Millet?
well i think we're i think we're all fascinated by argentina because uh we worry that um their past is our future where you had sort of this i don't know it's not zero growth or decline but subpar growth for for a century it's a complicated history of what went wrong it was you know obviously the peronist history with this very charismatic leader who had a lot of bad ideas There were ways, you know, and then there were ways that it took a long time. You know, in 1900, 1920, riches in Argentine was still a common expression that's sort of gone out of usage. And then, yeah, it's an open question whether Malay will succeed in turning Argentina around, you know, whether he will get reelected a year from now.
I still think he will because people sort of understand that it's so existential and you just can't go back. The problem for all of us is, is there any way we can learn from the history of Argentina? So it won't take us 100 years of decline to get there. I don't like the accelerationist, Leninist idea, which is Vladimir Lenin. The worse things get, the better they get because the closer you get to revolution. And then at the same time, the sense I always have in the US and Europe is people are upset, pessimistic, angry. It's never enough to lead to positive change. And instead, we just have this drift where you worry things have to get a lot worse before they turn around. But if you had to make a bet today, do you think we are close to a turning point? Because what we are seeing now in America, in Europe, in the West, the stumbling centrist governments, the British successful autocrats, that this is a healthy warning call and we will recover, we will reinvent ourselves? Or do you think that's basically the beginning of the end and the beginning of a new world order where the autocratic systems are going to prevail? I think you should always try to think of these things much more concretely,
less abstractly. So let me just flip it around as a question to you. Will people get rid of Mertz in Germany? It's like a complete total failure any way you cut it. And then, I don't know, there's there's a decent argument nothing will happen to him for another three years because you know everybody else thinks they won't do any better and so uh so yes there's there's an indirect answer that you think it's more likely that we're going to deteriorate further i'm not i'm not sure but it's it's it's sort of an open question it's like it's it's amazing how you know how robust the merch thing seems to be relative to how bad it seems to be so um so i don't know Yeah, that's probably my intuition is that things will keep drifting for a long way because the people who replace him don't really have answers to these problems.
If you frame the macroeconomic problems, again, sort of a boring macroeconomic version is we have very large welfare states, the taxes feel pretty high to me, and then we have very big deficits. and maybe the deficits would be sustainable if you had 0% interest rates. The interest rates are no longer zero. And so there's sort of a compounding runaway deficit problem. And you have basically three choices. Do you massively cut spending, which is the Malay answer? Do you massively hike taxes, which was basically completely shut down our societies and all growth? Or do you keep going with the deficits that take the can down the road? And for close to 20 years, the answer has been number three. Ever since the 2008 crisis, we've just been borrowing more and more money. And then my intuition is we're close to point where that ends. And then you're going to be pushed to a very non-centrist solution of either socialist levels of taxation or some really tough austerity measures. And, you know, the best idea Mertz has is just borrow more. Why do you care so much about politics?
Well, I don't know if I—I think about it probably too much. I mean, I'm not a politician. Would you imagine to ever become a politician? Never, never, never, never. You're 100% excluded. Look, I'm not sure I'm perfectly self-aware or anything like this, but I'm self-aware enough to know that I'm not electable. But it permeates our society. It is sort of like, I don't know, it's both toxic, but it's the air we breathe. So, I don't know. I have a schizophrenic view on it. I think about it a lot, and then I try to compartmentalize and ignore it as much as possible.
“In the U.S., nine out of 12 of those people made their own money. In Germany, all 20 of those 20 inherited it.”
Tonight you're going to receive the Axel Springer Award. And when I informed you about that, you said something very remarkable. You said, thank you. I always tried over the last decades to get Germany out of my mind. Intellectually, I did quite well, but I didn't get it out of my heart. car crashes injure over a million of us every year because we're human for over a decade we must been building a driver that's safer statistically 10 times safer in the cities we serve not because humans aren't enough but because they're everything based on over a 94% reduction in serious injury or worse crash rates. Learn more at Waymo.
Why not? What's still so German about you, being born in Frankfurt am Main in 1967, living now for almost all your life in America? Why is there still this emotional affiliation to Germany? Man, it would be strange if there weren't. I think it would be much more strange if there weren't. But you left Germany when you were one year old, so you don't have any memories, you don't have any cultural… My grandparents were here, you know, I was, there was sort of, in some ways I grew up, I went to, yeah, I went to English-speaking schools in America, but spoke German at home. So I really, I grew up between a sufficient spy about it. And so, yes, there's a part where it's sort of understandable. All these reasons things have gone somewhat wrong, but it's also very important for us to find a way to turn Germany around.
It's at the heart of Europe. In some ways, Europe is still, you know, at the core of Western civilizations. There's a crisis of the West. There's a crisis in Europe and Germany. Yeah, but you're shifting back to intellectual analysis. We were talking about feelings, about your heart. So what do you love about Germany? What is it? I mean, the past of Germany is difficult. We spoke about the present and the future. That's also quite difficult. So what do you love about Germany? It's just part—I'm always bad at answering this question. It's just part of who I am. Okay. Tonight we will have two of your co-founders, Alex Karp from Palantir and Max Levchin, with whom you founded PayPal.
So, Alex Karp also has this very, very strong affiliation to Germany. um with max it's a different history he's from ukraine but in any case there's a european element in it do you think that these two guys played such an important role for you in your business life but also in your personal development as friends because there is this common european denominator or doesn't that play a role it's probably a part of it it's it's uh I don't want to overdo it. I think there were sort of, there are a way that a lot of the founders of these tech companies, I think, are both insiders and outsiders. And so, you know, Alex and I both were insiders who went to the elite Stanford Law School.
And then, you know, I was in some ways an outsider to America. alex is um jewish where you always have a little bit of that as as part of the background and uh and it was somehow sorry you i didn't get it he's jewish and but it does nothing to your background but it's a little bit the outsider there's an outsider part okay okay and an insider i always i always say that these found the founders have have both the outsider insider dynamic and there There was, you know, there was a way, you know, Max was this super achieving straight A student, this incredibly, incredibly charismatic person. But then also, you know, grew up on the, you know, he left the Ukraine when he was 16 years old and they grew up in a poor part of Chicago.
And then it was, you know, so it was just, you know, it was just an incredible drive. being an outsider can really be an advantage I think in your case I wouldn't say it's both it's a lot it's this outsider-insider combination. People always exaggerate that. They exaggerate the outsider piece because that's always, you know, in the way you're so plain and dumb and stuff like that. And there's also some part where, you know, I grew up in Silicon Valley. Very few people did that. Okay. Let's assume in this perfect mix of being an insider and an outsider, you have developed an over-proportional degree of contrarianism. You love to contradict. I think For me, the word no is the foundation of freedom and democracy, so I also love to say no. But I think in your case, it's almost kind of an automatic impulse. As soon as there is a consensus or people get close to a consensus, you say the opposite.
All right. So just say no. I think that I don't think the point is to be contrarian for its own sake. I think because then you just look at the consensus and put a minus sign in front of it. That's not that interesting. You know, I think the real goal is always to try to think for oneself. And that's what I try to do. I don't think it is just this, you know, reflexively negative thing. How have you been able to develop that intrinsic strength, to listen to your own compass and not being influenced so much by zeitgeist, by consensus, by the juste milieu? Do you have any explanation why you've been able to develop that superpower?
you know i'm always again i'm always bad at the self psychoanalysis but i i you know i i i'm probably like interested in a lot of different things and so it's like big picture history and politics and economics and science fiction and the future and psychology so all these different things. And it's always, I don't know, this is sort of not a, in late modernity, we're supposed to be narrow specialists. It's the pin factory in Adam Smith where you have a hundred people working in a pin factory and everyone's specialized in one narrow area and somehow very efficient for people to be super specialized, but you lose sight of the big picture. And I've always wondered, How does everything fit together? How do we make sense of all these things? And maybe it's just sort of a, I don't know, a renaissance dilettante type thing that I'm rationalizing. But I tell myself there has to be room for at least one generalist in a world where everyone's hyper-specialized.
And in that renaissance spirit of having many interests and many fields of activity, where are the areas of passion and interest that have no professional, no pragmatic, no business rationale, that are purely kind of private, personal, irrational? don't tell me that you don't have it at all i don't i you know i i i probably still play way too much chess on the internet all the time and this was you know this was uh you know i uh was a scholastic chess player and uh it's this i don't know it's this very beautiful somewhat dangerously addictive um somewhat dangerously addictive game um it's probably not equivalent to all of reality just what i at various points of delusion in my teenage years like to say Everything in the world, if you didn't play chess, you didn't understand reality. It's probably too extreme a thing to say. But there are all sorts of questions that don't connect directly. I think a lot of these political questions, they're important. They frustratingly feel largely outside of our power.
And so, you know, I think they're important. I think they do somehow relate to business. In many ways, it might be healthier. It might be more profitable not to think about them and to just focus on a particular business. You have now four pretty young kids. To which degree did they change your life or is there anything that you already learned from them by watching them? it's um it's always um it's always thinking about um and it really changes your time horizons on the future you know and it is um if we're in this you know if we're in this accelerating technological world or in this crazy world where we don't know how the world's going to make it 2030 or 2035. If you're in this world of only adults, you can sort of pretend that you're just thinking about it year to year. But I don't know, my oldest daughter will be 81 years old in 2100.
And so, yeah, you start to wonder what will the 22nd century be like? Talking about time horizons, I mean, one of the areas that you're particularly interested in,
“it would be really trying to do something about dementia, about finding a way to slow or reverse declines in people's brains.”
I'd want to find a way to tackle in the years ahead. Peter, to conclude, I would love to ask you a question that you are asking almost every candidate you are talking to before you hire her or him or people that you find interesting. Tell me a truth that you believe in that almost nobody else of Greece with. I'm giving you a lot today already. Let's see. Just give me one second. Take your time. In any case, it's nice to see that it is also a tough question for you. There's always a meta-level version of this where there are all sorts of things that you think are very, that nobody believes in.
And then you realize, actually, a lot of people almost do. And so maybe it's contrarian. And then we can sort of debate which is the contrarian one. So when I started giving these speeches about the Antichrist three years ago, I thought this was an extremely unconventional view that was very far outside the zone. And so I would have said that that's an answer. And now I would say, and then most people would say, yeah, that's a really crazy thing to talk about. I would now say that it's actually, it's not contrarian, that most people think something like the Antichrist is right around the corner, that we have incipient totalitarianism throughout the world, and so it was less contrarian than I thought.


