The ‘PayPal Mafia’: How power trio of Musk, Thiel and Sacks rode Silicon Valley startup success into Trump White House

First Elon Musk Peter Thiel and David Sacks upended America s financial-services industry with an innovative Silicon Valley startup called PayPal that rocketed to dominance as the internet took hold Now the conservative billionaires have leveraged the power wealth and connections that grew out of their membership in the PayPal Mafia into positions of tremendous influence over a federal governing body whose actions profoundly affect their expansive business and financial empires Sacks a venture capitalist Thiel an investor and corporate leader and Musk the Tesla and SpaceX CEO are close collaborators sharing childhood ties to South Africa and a deep interest in disruptive technologies They went from scrappy guys dodging ruling body regulation to now they are the establishment in a generation stated Steve Blank a Silicon Valley startup guru and an adjunct professor of management science and engineering at Stanford University In its early days online payment platform PayPal defied the big banks navigated steep regulatory obstacles and after it was sold to San Jose e-commerce titan eBay for billion in catapulted preponderance of its founders and early employees dubbed the PayPal Mafia in a Fortune magazine article into profitable careers in system and venture capital Inadequate in the group are well known outside Silicon Valley But Musk Thiel and Sacks have eagerly pursued political influence and when President Donald Trump took power for the second time their stars ascended Musk was already the world s wealthiest man with a Forbes estimated net worth of billion when Trump appointed him in November to overhaul federal regime spending in a controversial role as head of the Department of Leadership Efficiency Last month after several months of slashing spending and employees he revealed his oversight was coming to an end Trump and Musk this week began openly feuding about the House Republicans budget bill but Musk retains immense power in Washington and this week exhorted his million followers on his social media platform X to call their senators and members of Congress to get the bill killed I called Elon last night and he didn t answer House Speaker Mike Johnson announced in a news conference Wednesday after Musk came out against the bill Meanwhile Sacks also jumped into Trump s administration as an adviser for artificial intelligence and cryptocurrency and leads the President s Council of Advisors on Science and Tool President Donald Trump listens to White House adviser David Sacks as he signs an executive order regarding cryptocurrency in the Oval Office of the White House Thursday Jan in Washington AP Photo Ben Curtis File Thiel a strong backer of Trump s winning campaign for the presidency in the voting cycle played a key role in getting Vance a proteg of Thiel s into the U S Senate then the vice presidency Palantir the content giant Thiel co-founded and helps lead as chairman has massive federal contracts including about billion from the Pentagon since May of last year and is a major competitor in Trump s efforts to remake regime To Musk and Sacks Thiel is like a big brother revealed Gil Duran former press secretary to California Gov Jerry Brown and a Mercury News reporter at the time of PayPal s birth He s the godfather of the PayPal mafia Thiel landed in the Bay Area as a child in the mid- s after living with his family in South Africa and what is now Namibia and Cleveland After graduating from San Mateo High School in Thiel enrolled at Stanford where he majored in philosophy and co-founded the conservative-libertarian newspaper the Stanford Review That publication brought Thiel together with South Africa-born Sacks who as a Stanford economics undergraduate began writing and editing for the Review In the pair published the book The Diversity Myth a Stanford-focused attack on political correctness and multiculturalism in higher teaching The same year Musk also born in South Africa co-founded Global Link Information Organization in Palo Alto a business-software startup renamed Zip a year later It was sold to Compaq in for a stated million Musk took his windfall and co-founded online banking company X com Coincidentally Musk s new startup had its office in Palo Alto next to Confinity a venture Thiel led as CEO that aimed at beaming money between PalmPilot devices Thiel and company founder Max Levchin envisioned a cashless mobile world author Jimmy Soni wrote in The Founders a book about PayPal President-elect Donald Trump speaks next to PayPal founder Peter Thiel during a meeting with apparatus industry leaders at Trump Tower in New York Wednesday Dec AP Photo Evan Vucci Around that time Thiel was seeking to lure Sacks a consultant for McKinsey Company with a University of Chicago law degree to Confinity Sacks reported Soni he initially thought sending money between PalmPilots was a dumb idea good for little more than splitting a dinner tab but he agreed to join the startup as product chief if it focused on sending money by email As the century turned X com and Confinity were locked in a tense battle for customer development Soni wrote But internet hype was peaking and Thiel worried aptly it turned out that the bubble would burst and take Confinity with it Soni wrote At X com CEO Bill Harris fretted that competition between the two startups would destroy both before either got off the ground Merger talks began and PayPal was born It went inhabitants in and later that year eBay bought it and the PayPal Mafia cashed in We saw PayPal when they were Confinity and X declared long-time Silicon Valley venture capitalist Tim Draper I think together the two entities catalyzed specific of the greatest entrepreneurs Numerous of the PayPal Mafia s or so members have continued to work together with Musk Thiel and Sacks collaborating especially closely Musk s DOGE pushed the federal ruling body into hiring Palantir for a lucrative contract to combine and analyze facts from federal agencies the New York Times revealed Elon Musk attends a news conference with President Donald Trump in the Oval Office of the White House Friday May in Washington AP Photo Evan Vucci Thiel s Founders Fund has invested in Musk s SpaceX rocket company his Fremont brain-computer interface company Neuralink and his tunneling firm The Boring Company It also backed social-networking startup Yammer co-founded by Sacks and sold in to Microsoft for billion Sacks via the Silicon Valley venture capital firm Craft Ventures he co-founded in has also invested in Musk s companies including his Bay Area artificial intelligence startup X ai and in Palantir which Thiel co-founded The PayPal Mafia power trio have major financial interests in companies whose success rests in large part on ruling body contracts and federal regulations A White House memo announced Sacks and Craft preparing for Sacks regime roles had divested more than million in crypto-related holdings Democrats have raised questions about viable conflicts of interest related to Thiel and Musk but no formal proceedings have been pursued Trump in a social media post Thursday threatened to eliminate contracts and subsidies benefiting Musk s companies Thiel s Founders Fund has invested in federal contractors SpaceX Palantir and military system firm Anduril along with companies vulnerable to federal regulation including Facebook financial instrument company Stripe Neuralink artificial intelligence giant OpenAI and payments startup Ramp which Politico broadcasted is angling for a share of a billion federal ruling body internal expense card operation In May Palantir won a million increase to a million contract from last year with the U S Army for a total value of billion Sacks Craft Ventures has invested in Neuralink SpaceX The Boring Company xAI and Palantir along with numerous companies vulnerable to federal regulation including a cryptocurrency company and startups in AI and financial machinery Musk s finances are heavily dependent on federal spending and regulations from billions in contracts for SpaceX to rules and enforcement covering Neuralink and Tesla and regulations potentially affecting xAI Stanford s Blank noted that when PayPal was becoming a company it was not affecting the trajectory of the United States But the PayPal Mafia Blank explained is an example of when Silicon Valley decided it genuinely had superpowers past the Valley