Peter Thiel Says Trump Administration Overcorrected With Loyalty Tests to Staff 'Not Very Smart' People

Peter Thiel has accused Donald Trump's administration of swinging too far towards loyalty when hiring staff, arguing the result is a government run by people who are 'not very smart, but very loyal.'

The billionaire investor made the remark during a podcast interview with German journalist Mathias Döpfner, published on 24 September on the MD MEETS show. Thiel, one of Trump's earliest and most prominent financial backers, was reflecting on nearly a decade of his own involvement in Trump-era politics.

To recall, Thiel became a significant figure in Trump's circle after backing his 2016 campaign, reportedly donating around $1.25 million (£940,000) through a mix of super PAC contributions and direct campaign funds, according to reporting by The New York Times.

He has more recently distanced himself from unconditional support, having said he regrets some of his backing. The comments to Döpfner mark one of his sharpest public assessments yet of how Trump has staffed his government.

Asked by Döpfner how he would assess Trump's achievements and failures roughly ten years on, Thiel did not offer a tidy verdict. 'My fast answer is, you should ask me in ten years or so, and we'll see how it all works out,' he said.

He added, more pointedly, that he wished Trump had 'appointed more competent people,' a line that cuts against the loyalty-first ethos many observers associate with the current administration.

Thiel framed the criticism as a story of two administrations making opposite errors. 'I think the two administrations kind of made opposite mistakes,' he told Döpfner. '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 an administration staffed by not very smart, but very loyal people. And so there are all sorts of ways it can be criticised.'

Why Peter Thiel's Warning Extends Beyond Trump

The interview did not stop at staffing gripes. Thiel used the platform to flag what he sees as a wider pattern in American politics, one in which voter fatigue with establishment figures eventually produces a backlash.

He pointed to the decline of the Bush family's standing within the Republican Party as an early example, and Trump's own 2016 insurgency as the consequence.

Now, he suggested, a similar reckoning could be brewing on the other side. Thiel described the Democratic Party's 'Clinton-Obama centre-left establishment' as vulnerable to the same kind of internal revolt, noting that establishment-aligned Democrats have only narrowly held off more progressive challengers in 2016, 2020 and 2024.

'I don't know if they'll be able to do it in '28,' he said of the party's chances heading into the next presidential cycle.

His real worry, though, is what comes after. Thiel said a takeover by the Democratic Socialists of America would matter far more than any Republican infighting, given that Democrats currently hold the establishment role in American politics.

'If the Democratic Socialists take over the Democratic Party, that's a much bigger deal,' he said, going as far as to call the prospect potentially 'the end of America.'

Peter Thiel Draws a Line Between Disruption and Catastrophe

Thiel was careful to separate the kind of disruption he welcomed in 2016 from what he fears might come next. He said he does not want 'disruption of the Democratic Socialist variety,' describing that outcome as 'catastrophic' were it to materialise.

It's a fairly stark line for someone who spent years bankrolling the very disruption he now credits, and questions, in the same breath.

'I worry that the establishment Democratic Party has failed as badly as the establishment Republicans,' Thiel said. 'And so we are going to get this disruption, and there is a risk that the US will shift very far to the left. That's the real disruption we're going to get.'

Thiel, who co-founded PayPal and Palantir Technologies, has said previously that he has no intention of taking a formal role inside the Trump administration. Palantir, notably, has continued to secure billion-dollar federal contracts under Trump, a detail that sits somewhat awkwardly alongside Thiel's public distancing.

Whether his remarks change anything inside the West Wing is, frankly, an open question. Nothing about Thiel's comments has been addressed by the White House, and it remains unclear whether the criticism will register with Trump himself.