The Surveillance State of America
How Peter Thiel, Silicon Valley, and Intelligence Agencies Developed the Modern Surveillance State of America
We need to talk about Peter Thiel. You may know him from his involvement with Palantir - one of the most influential data mining and processing companies in U.S. history - which currently holds billion-dollar contracts with agencies like the FBI, DOJ, CIA, DoD, and HHS, among others. You may also know him from his speeches and written pieces in which he states his belief that “democracy and freedom are no longer compatible.” You may have even noticed his peculiarly close relationship with J.D. Vance (Thiel spent $15 million on Vance’s 2022 Senate campaign, invested in his first venture capital startup, and introduced Vance to Trump before the 2024 election).
Most recently, in an interview with NYT opinion columnist Ross Douthat, Thiel struggled to find an answer when asked if he believed the human race should endure, and claimed that Greta Thunberg could be the Antichrist.
It’s somewhat perplexing that a man who struggles to decide if the human race deserves to exist should have so much power and influence in our government and its ability to track its citizens’ data. To better understand how Peter Thiel became so intertwined with the government and its ability to collect our data, we need to take a look at his history and his involvement with Silicon Valley and the intelligence community between the late 1980s and early 2000s.
Peter Thiel was born in West Germany in 1967 to Klaus Friedrich and Susanne Thiel. The Thiels emigrated to the U.S. when Peter was just over one year old, settling in Cleveland, OH. Between 1968 and 1977 the Thiel family moved frequently, spending a large portion of the decade living in South Africa and present-day Namibia, where Klaus Friedrich Thiel worked as a chemical engineer for the Rössing uranium mine. The family settled in Swakopmund, a German settlement near the Rössing mine, known for its historical ties to German nationalism and glorification of Nazism and Adolf Hitler, even throughout the 1980s. It was also previously the site of genocide in the late 19th and early 20th centuries perpetrated by the Second Reich of the German Empire, well before the Third Reich and Hitler came to power.
While there is not much information detailing whether the Thiels explicitly supported the Nazi ideology shared in the German community of Swakopmund, it would seem that the family benefitted from the prevalent apartheid system and a young Peter Thiel would have been exposed to such ideology during his formative years.
The Thiels eventually moved back to the U.S. and settled in Foster City, CA in 1977. As a teenager, Peter Thiel was fascinated with science fiction and was an avid reader of The Lord of the Rings (Palantir Technologies, Valar Ventures, Mithril Capital, and Arda Capital are all Tolkien-inspired names for Thiel’s companies). After graduating as valedictorian of his class at San Mateo High School, Thiel went on to study philosophy at Stanford University.
While at Stanford, Thiel co-founded The Stanford Review, which aimed to offer a libertarian, if not overtly-conservative, alternative to counter the “stifling, overwhelmingly left-leaning orthodoxy” of the Stanford campus and to address the “issues” that arose from multiculturalism and diversity.
Thiel served as the first editor-in-chief of the publication until he graduated in 1989. Thiel earned his juris doctor from Stanford Law School in 1992, after which he briefly clerked for the 11th Circuit U.S. Court of Appeals and briefly worked for Sullivan & Cromwell (a law firm whose leadership during the 1920s and 1930s, under the Dulles brothers, maintained business ties with German industrialists and entities, indirectly funding Adolf Hitler’s rise to power).
Peter Thiel’s first successful venture came in 1998 when he founded Fieldlink along with Max Levchin and Luke Nosek. Described as “a security focused company” which allowed users to store encrypted information on Palm Pilots and other PDA devices, the company had a goal of creating the world’s first digital wallet - allowing decentralized consumer-to-consumer digital payments. Fieldlink soon changed its name to Confinity and in 1999 its newest product was introduced - PayPal, the world’s first digital online payment system.
The following year Confinity merged with X.com, an American online bank founded by Elon Musk. Similar to Peter Thiel, Elon Musk also grew up in South Africa where apartheid remained prevalent even through the 80s and 90s. Elon Musk moved to California in 1995 to study at Stanford University, but never enrolled in classes. Instead, Musk and his brother Kimbal created Zip2, an online city guide and directory service (think Yellow Pages for the internet), which was then acquired by Compaq for $307 million in 1999. Elon made roughly $22 million from the sale, which he used to create X.com along with Ed Ho, Harris Fricker, and Christopher Payne.
Following the merger with Confinity, the company retained its X.com name and Elon Musk served as the CEO of the company. The board of the company eventually ousted Musk as CEO and replaced him with Thiel, and the name of the company was officially changed to PayPal in 2001. In 2002, PayPal went public with the IPO of PYPL and generated over $60 million. Later that year, eBay purchased PayPal for $1.5 billion worth of eBay stock, with Musk receiving close to $175 million and Thiel receiving $55 million.
With his newfound fortune, Peter Thiel went on to create Palantir Technologies in 2003 with the goal of helping government intelligence agencies collect and analyze large and complex sets of data to uncover hidden patterns and threats. The name Palantir may sound familiar to fans of The Lord of the Rings - the palantiri were the indestructible “seeing stones” used to communicate and allow the user to see distant places or events.
In the wake of the September 11th terrorist attacks in 2001, it became abundantly clear that U.S. intelligence agencies severely lacked the ability and the technology to accurately assess terrorist threats before they occurred. Just one month after the attacks, President Bush signed the Patriot Act.
Pitched to American citizens as a necessity for national security and safety, the Patriot Act was an unprecedented expansion of government surveillance and data collection. It allowed the FBI and other intelligence agencies to force private third party companies, such as telecom companies, banks, and internet service providers, to overturn any data deemed necessary for “national security” purposes.
It also allowed for easier interagency communication between agencies like the NSA, CIA, and FBI, as well as local and state police agencies. In effect, the Patriot Act broke down the barriers between the agencies and allowed them to collect vast amounts of data on private citizens without their knowledge. However, analyzing the data became an issue due to the sheer volume of data collected, necessitating software to compile and analyze the data more efficiently.
Coincidentally, years before the tragedy of 9/11 and the push for data collection in the name of “national security,” the CIA had already started working on its own efforts to collect data using new technology developed in Silicon Valley and the private sector.
Near the turn of the century, George Tenet (CIA director from 1997 to 2004) was concerned that the CIA and other government intelligence agencies had fallen behind in the technological arms race. Under the authorization of President Clinton, and with the guidance of former Lockheed-Martin President and CEO Norman R. Augustine, Tenet established an independent non-profit venture capital firm to bridge the gap between the CIA and Silicon Valley technology.
Founded in 1999, In-Q-Tel’s mission was to act as the conduit for investment into research of “disruptive” technologies in order to better equip intelligence agencies with cutting-edge technology.
Following the passage of the Patriot Act, the Defense Advanced Research Projects Agency (DARPA), with support from Vice President Dick Cheney, established the Information Awareness Office (IAO) led by Admiral John Poindexter (the former NSA advisor to Reagan, who was involved and convicted for his role in the Iran-Contra scandal). In 2003 Poindexter launched the Total Information Awareness (TIA) program under the IAO, which he described as the “Manhattan Project for counter-terrorism.”
TIA sought to create a vast and centralized database that could collect nearly every piece of electronic information, including credit card purchases, airline travel records, financial transactions, medical histories, academic records, immigration records, law enforcement databases, phone call records, and internet activity.
TIA planned to use this information to analyze patterns and better predict when a “future attack” would occur. The program proved wildly unpopular to those who were aware of it, both for its lack of oversight and the invasion of privacy that it presented. There was also significant backlash over the IAO’s logo, which depicted the Eye of Providence above an unfinished pyramid (like the one on the U.S. one dollar bill and discussed exhaustively by Illuminati conspiracy theorists). The TIA was short lived, ending in September 2003 when Congress voted unanimously to defund the program and shut it down.
Despite the TIA’s temporary setback, the intelligence community - and in particular the CIA through In-Q-Tel - continued to search for emerging technologies to help manage the vast amount of data being collected. In early 2004, In-Q-Tel CEO Gilman Louie identified Palantir as a promising up-and-coming data management company in Silicon Valley and invested $2 million into the company through In-Q-Tel. The CIA had officially become the first outside investor of Palantir.
Then, a bombshell. In December 2005, it was revealed to the general public by the New York Times that President George W. Bush authorized the National Security Agency to conduct surveillance of American communications without FISA warrants. This secret program, operating outside the established legal framework, faced intense legal and political backlash from citizens and civil liberties advocates; the government had been circumventing legal oversight to collect data on its own citizens. In response to mounting legal pressure and widespread public outcry, and under the tried-and-true claim of national security and safety, the Protect America Act was passed by Congress in 2007 and signed by President Bush.
The intent of the Protect America Act was to strengthen the intelligence community’s ability to conduct surveillance on foreign targets in order to asses terrorist threats; the reality is that it gave these agencies the legal ability to forgo a warrant to conduct surveillance, even on American citizens on U.S. soil if they were “reasonably believed” to pose a threat.
This opened the flood gate for data collection in the U.S., and intelligence agencies had an unprecedented amount of data to analyze. Although the NSA’s Special Source Operations division introduced a program called XKeyscore to collect and search through global communications, challenges still arose; the sheer amount of data collected was proving difficult to sift through and more sophisticated technology was needed to index and analyze the data.
Enter Palantir and its flagship intelligence platform, Gotham, which became fully operational in 2008. Gotham was designed as a powerful data analysis tool that could integrate vast, disparate, and often unstructured datasets into a unified, searchable environment for analysts to uncover hidden connections and patterns. Under Gotham, Palantir collaborated with the NSA to create XKeyscore Helper, which the NSA used to run their surveillance program.
In June 2013, NSA intelligence contractor Edward Snowden leaked highly classified information from the NSA, revealing an extensive global surveillance program run by the NSA and the Five Eyes intelligence alliance. By then, Snowden had been involved with the NSA and CIA for a few years - In 2005 he worked as a security specialist at the University of Maryland’s Center for Advanced Study of Language, which was an NSA facility, and between 2006 and 2009 he worked with the CIA as a telecom systems administrator. Snowden worked as a contractor for Dell in 2009 where he managed computer systems for multiple government agencies.
By 2011 Snowden had become an expert in cyber counterintelligence and had grown increasingly concerned with the NSA’s ability to acquire and store data on U.S. citizens. Just prior to Snowden’s revelation of mass-surveillance, President Obama’s Director of National Intelligence James Clapper appeared before the Senate Intelligence Committee on March 12, 2013 to answer questions regarding national security.
When asked if the NSA collects any type of data at all on Americans, Clapper answered “No, sir. Not wittingly. There are cases where they could, perhaps inadvertently perhaps, collect - but not wittingly.”
Snowden, who was very familiar with the NSA’s use of XKeyscore Helper, was outraged by Clapper’s “assessment” that the NSA did not “wittingly” access the information of American citizens. That same month, Snowden began working for Booz Allen Hamilton, a private government and military contractor specializing in AI and digital technology, who contracted him to work at an NSA facility in Kunia, Hawaii as a a system administrator.
Although he only worked there for roughly three months, Snowden was able to gain top-secret clearance, granting him access to highly sensitive information pertaining to secret programs the NSA ran. He was able to access the NSA’s global surveillance programs, operation details, and learn the technical specifications of the programs. In total, Snowden downloaded approximately 1.7 million classified documents from NSA servers. What he saw alarmed him.
Snowden learned the details of a program called PRISM, which collected user data such as emails, chat logs, photos, videos, stored files, and login details from U.S. internet companies like Google, Apple, Microsoft, Facebook, and Youtube, among others. This was just one of many programs that the intelligence agencies used to collect data on citizens; he also discovered that other countries were involved with these programs as well.
Having collected all of this information, Snowden flew straight to Hong Kong in May 2013 where he met journalists Glenn Greenwald, Ewan MacAskill, and Laura Poitras of The Guardian, and informed them of the vast network of intelligence agencies and their use of secret surveillance programs to track data on their citizens. On June 6, 2013 the journalists published an article describing what Snowden had revealed to them. It was revealed that U.S. intelligence agencies had a $52.6 billion “black budget” and that the government was paying private technology companies for access to their communications networks. When speaking to a German news channel in August 2013, Snowden said:
“Let’s say you work at a major German corporation and I want access to that network. I can track your username, on a website, on a forum somewhere, I can track your real name, I can track associations with friends - and I can build what is called a fingerprint, which is network activity unique to you. Which means that anywhere you go in the world, anywhere you try to hide your online presence, hide your identity, the NSA can find you. And anyone who is allowed to use this, or who the NSA shares the software with, can do the same thing.”
Following the release of the files, Snowden was charged under the Espionage Act by the U.S. government. He was able to eventually flee to Russia to escape extradition, but the damage had already been done. The intelligence community and the Obama administration attempted to portray him as a spy and a traitor to the country. They defended the programs as legal, necessary, and effective tools for counterterrorism. President Obama even stated “I don’t think Mr. Snowden was a patriot” and condemned him as a criminal who broke the law by disclosing classified information. But what Edward Snowden did was alert the world to the growing surveillance state led by U.S. intelligence agencies and software programs like Gotham.
While it may be tempting to just leave the story at that, this wasn’t the only venture into data collection and surveillance by Peter Thiel and Palantir. In addition to creating Palantir with the money he made from selling PayPal, Thiel was also an angel investor - and first outside investor - in Facebook back in August 2004. Facebook would eventually go on to be involved with the Cambridge Analytica scandal, which collected user data on millions of Facebook users and micro-targeted political ads in the 2016 election, which was used to help get Trump elected (I will be doing a deeper examination of this in a future post). It was actually a Palantir employee who initiated the events that led to this scandal.
In 2016 Peter Thiel spoke at the Republican National Convention, critiquing what he viewed as the failures of the American political system and technological stagnation. He praised Trump’s status as a political “outsider” and believed that Trump represented the future of the political establishment in Washington. He went on to donate $1.25 million to Trump’s campaign and was eventually appointed to Trump’s transition team after his election win. Theil played an active role in vetting candidates for the Trump administration and had a rather close personal friendship with Trump during this time.
All of this hard work paid off for Peter Thiel and Palantir during Trump’s first term. Palantir secured huge contracts with Immigration and Customs Enforcement (ICE), who began to use Palantir’s software, Gotham, to identify, track, and deport undocumented immigrants. Palantir also expanded its existing contrasts with the DoD, DHS, and other agencies, receiving over $1 billion during Trump’s first term in office.
When Palantir went public and registered with the SEC in 2020 for its direct listing, the company’s stated goal was to “become the default operating system for data across the U.S. Government.”
In 2011 Thiel gave a talk at Yale in which he discussed his views on “technological stagnation” and the need for truly innovative ideas to address societal problems. One of the students in the audience, J.D. Vance, found this talk to be very informative and decided to join the cause. Vance left Yale after graduating to work for Mithril Capital - Thiel’s venture capital firm based in Silicon Valley. In 2019 Thiel invested in Vance’s own venture capital firm, Narya Capital, along with Eric Schmidt and Marc Andreessen.
One of the most concerning friendships of Peter Thiel’s is his close personal connection with Curtis Yarvin - the self-proclaimed “philosopher” behind The Network State, which proposes destroying American democracy and institutions in favor of creating tech-led nation-states. Yarvin has “jokingly” stated that in this network state, anyone who is not of use to society could be “used as biofuel.”
Although the premise of the Network State sounds like an outlandish sci-fi spoof, the ground has already been laid for its implementation. Próspera, located along the coast of Honduras, is one of the first of such “states” to be created. Funded by Pronomos Capital (which is financially backed by Peter Thiel and Marc Andreessen), construction on Próspera began in 2021. It is operated as a “sovereign, free-market city” that exists outside of Honduran law and governance - surely nothing could go wrong with that, right?
Between 2021 and 2022, Peter Thiel donated, or rather invested, over $15 million into J.D. Vance’s Senate race in Ohio. It was also at this time that Thiel first introduced J.D. Vance to Donald Trump, in an effort to gain Trump’s endorsement for his 2022 senate campaign. Vance would end up winning his senate race and would become Trump’s Vice President in 2024. Thiel now has one of his most prominent mentees, who owes their entire business and political career to Thiel, just a heartbeat away from the Presidency. Not bad for a guy who wants to collect data on every person in the world and create his own “nation states” that exist outside of government reach and do not have to comply with local or national laws.
If you want to read about this further, click here to read about the Technocratic Coup, led by Thiel, Vance, Yarvin, Andreessen, and others from Silicon Valley, and potential interference into the 2024 election.