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The Republicans Have a Peter Thiel Problem

As the campaigns of Blake Masters and JD Vance struggle, the party finds itself in a standoff with one of Silicon Valley’s most ruthless investors.

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Illustration: John Provencher for Bloomberg Businessweek

Venture capitalists—when trying to explain how their business works, or, more often, when waving away financial losses—sometimes bring up the “J-curve.” This is a concept that says that successful funds tend to lose money before posting big profits, leading to returns that when plotted on a graph look like the letter “J.” VCs buy stakes in a bunch of startups, which by definition are likely to fail, and then hope that one of them—two, if they’re really lucky—turns into the next Google while the rest go under. That takes years, which can lead to an uncomfortable stretch when even the smartest investors start looking unbelievably, almost inexplicably, foolish. Sometimes the curve turns up and they’re vindicated; sometimes it never does.

Peter Thiel is living through one of these waiting-on-the-J-curve moments thanks to the recent performance of his political portfolio. During the primaries, the venture capitalist teamed up with former President Donald Trump to help win Republican Party nominations for two ex-employees, JD Vance and Blake Masters, neither of whom had ever held political office or seemed to have any business running for the US Senate. Thiel provided the funds—$15 million for each race, instantly legitimizing Vance and Masters and turning Thiel into one of the top Republican donors. Trump provided the MAGA credibility, and the candidates assumed positions of ideological subservience, loudly proclaiming Trump’s ineffable brilliance, denying the legitimacy of the 2020 vote, and attacking anyone who believed otherwise. They pushed the Great Replacement, a racist conspiracy theory, railed about the dangers of “wokeness,” and generally trolled 24/7 on social media.