First Elon Musk, Peter Thiel and David Sacks upended America’s financial-services trade with an revolutionary Silicon Valley startup known as PayPal that rocketed to dominance because the web took maintain.
Now the conservative billionaires have leveraged the ability, wealth and connections that grew out of their membership within the “PayPal Mafia” into positions of great affect over a federal authorities whose actions profoundly have an effect on their expansive enterprise and monetary empires. Sacks, a enterprise capitalist, Thiel, an investor and company chief, and Musk, the Tesla and SpaceX CEO, are shut collaborators, sharing childhood ties to South Africa and a deep curiosity in disruptive applied sciences.
“They went from scrappy guys dodging government regulation to now they are the government, in a generation,” mentioned Steve Clean, a Silicon Valley startup guru and an adjunct professor of administration science and engineering at Stanford College.
In its early days, on-line fee platform PayPal defied the large banks, navigated steep regulatory obstacles, and, after it was offered to San Jose e-commerce titan eBay for $1.5 billion in 2002, catapulted most of its founders and early staff — dubbed the PayPal Mafia in a 2007 Fortune journal article — into profitable careers in know-how and enterprise capital.
Few within the group are well-known outdoors Silicon Valley. However Musk, Thiel and Sacks have eagerly pursued political affect, and when President Donald Trump took energy for the second time, their stars ascended.
Musk, 53, was already the world’s wealthiest man, with a Forbes’ estimated internet value of $306 billion, when Trump appointed him in November to overtake federal authorities spending in a controversial function as head of the Division of Authorities Effectivity. Final month, after a number of months of slashing spending and staff, he mentioned his oversight was coming to an finish.
In the meantime, Sacks, additionally 53, jumped into Trump’s administration as an adviser for synthetic intelligence and cryptocurrency, and leads the President’s Council of Advisors on Science and Know-how.
President Donald Trump listens to White Home adviser David Sacks as he indicators an govt order relating to cryptocurrency within the Oval Workplace of the White Home, Thursday, Jan. 23, 2025, in Washington. (AP Photograph/Ben Curtis, File)
Thiel, a robust backer of Trump’s profitable marketing campaign for the presidency within the 2016 election cycle, performed a key function in getting Vance — a protegé of Thiel’s — into the U.S. Senate, then the vice presidency. Palantir, the information big Thiel co-founded and helps lead as chairman, has large federal contracts, together with about $1.6 billion from the Pentagon since Could of final 12 months, and is a significant participant in Trump’s efforts to remake authorities.
That publication introduced Thiel along with South Africa-born Sacks, who as a Stanford economics undergraduate started writing and enhancing for the Assessment. In 1995, the pair printed the e book “The Diversity Myth,” a Stanford-focused assault on political correctness and multiculturalism in greater training.
The identical 12 months, Musk, additionally born in South Africa, co-founded World Hyperlink Info Community in Palo Alto, a business-software startup renamed Zip2 a 12 months later. It was offered to Compaq in 1999 for a reported $300 million. Musk took his windfall and co-founded on-line banking firm X.com.
Coincidentally, Musk’s new startup had its workplace in Palo Alto subsequent to Confinity, a enterprise Thiel led as CEO, that aimed toward beaming cash between “PalmPilot” gadgets. Thiel and firm founder Max Levchin “envisioned a cashless mobile world,” writer Jimmy Soni wrote in “The Founders,” a 2022 e book about PayPal.
President-elect Donald Trump speaks subsequent to PayPal founder Peter Thiel throughout a gathering with know-how trade leaders at Trump Tower in New York, Wednesday, Dec. 14, 2016. (AP Photograph/Evan Vucci)
Because the century turned, X.com and Confinity have been “locked in a tense battle for customer growth,” Soni wrote. However web hype was peaking, and Thiel frightened — aptly, it turned out — that the bubble would burst and take Confinity with it, Soni wrote. At X.com, CEO Invoice Harris fretted that competitors between the 2 startups would destroy each earlier than both obtained off the bottom.
Merger talks started, and PayPal was born. It went public in 2002, and later that 12 months, eBay purchased it and the PayPal Mafia cashed in.
“We saw PayPal when they were Confinity and X,” mentioned long-time Silicon Valley enterprise capitalist Tim Draper. “I think together the two entities catalyzed some of the greatest entrepreneurs.”
Most of the PayPal Mafia’s 20 or so members have continued to work collectively, with Musk, Thiel and Sacks collaborating particularly carefully.
Musk’s DOGE pushed the federal authorities into hiring Palantir for a profitable contract to mix and analyze knowledge from federal companies, the New York Occasions reported.
Elon Musk attends a information convention with President Donald Trump within the Oval Workplace of the White Home, Friday, Could 30, 2025, in Washington. (AP Photograph/Evan Vucci)
Thiel’s Founders Fund has invested in Musk’s SpaceX rocket firm, his Fremont brain-computer interface firm Neuralink, and his tunneling agency The Boring Firm. It additionally backed social-networking startup Yammer, co-founded by Sacks and offered in 2013 to Microsoft for $1.2 billion.
Sacks, by way of the Silicon Valley enterprise capital agency Craft Ventures he co-founded in 2017, has additionally invested in Musk’s corporations — together with his Bay Space synthetic intelligence startup X.ai, and in Palantir, which Thiel co-founded.
The PayPal Mafia energy trio have main monetary pursuits in corporations whose success rests largely on authorities contracts and federal laws. A White Home memo mentioned Sacks and Craft, getting ready for Sacks’ authorities roles, had divested greater than $200 million in crypto-related holdings.
Democrats have raised questions on attainable conflicts of curiosity associated to Thiel and Musk however no formal proceedings have been pursued.
Trump in a social media publish Thursday threatened to remove contracts and subsidies benefiting Musk’s corporations.
Thiel’s Founders Fund has invested in federal contractors SpaceX, Palantir, and navy know-how agency Anduril, together with corporations weak to federal regulation, together with Fb, monetary know-how firm Stripe, Neuralink, synthetic intelligence big OpenAI and funds startup Ramp, which Politico reported is angling for a share of a $700 billion federal authorities inside expense card program. In Could, Palantir gained a $795 million enhance to a $480 million contract from final 12 months with the U.S. Military, for a complete worth of $1.3 billion.
Sacks Craft Ventures has invested in Neuralink, SpaceX, The Boring Firm, xAI, and Palantir, together with quite a few corporations weak to federal regulation, together with a cryptocurrency firm and startups in AI and monetary know-how.
Musk’s funds are closely depending on federal spending and laws, from billions in contracts for SpaceX to guidelines and enforcement masking Neuralink and Tesla, and laws doubtlessly affecting xAI.
Stanford’s Clean famous that when PayPal was changing into an organization, it “was not affecting the trajectory of the United States.” However the PayPal Mafia, Clean mentioned, “is an example of when Silicon Valley decided it actually had superpowers past the Valley.”
