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Peter Thiel doubles down on patriotism in the Trump era
Venture capital and the government are now brothers in arms
PETER THIEL is obsessed with atoms. The prescient venture capitalist has said that the Manhattan Project, which created the first atomic bomb, epitomised how America’s government used to “get things done”. He has long argued that an excessive focus on “bits” (software) at the expense of “atoms” (hardware) has helped produce economic stagnation in America. In 2015 he wrote that the country needed “a new atomic age” to produce clean, abundant energy. A decade later he has friends at the top of President Donald Trump’s administration who share his vision. It is starting to fall into place.
In mid-April Founders Fund, Mr Thiel’s biggest venture-capital (VC) firm, was the main investor in a funding round that raised $50m for General Matter, which aims to become the first privately funded startup to enrich uranium in America. In a move rare for Mr Thiel, because he likes to stay in the background, the billionaire will also sit on its board. The investment may seem small considering the scale of General Matter’s ambition. It hopes to develop a technology from scratch to produce u-235 enriched to a level up to four times greater than anything commercially available today, in order to fuel a new breed of advanced nuclear reactors. It will probably cost billions.
The fledgling firm is part of a group of unabashedly patriotic startups, backed by MAGA-friendly VCs such as Founders Fund and Andreessen Horowitz, that represent a new mindset in Silicon Valley. As Mr Trump circles the wagons against China and prioritises autarky, such startups are seizing on the opportunity. General Matter boasts that it will reduce America’s dependence on Russia for uranium supplies, provide energy security to compete in the artificial-intelligence (ai) race with China, and use exclusively American technology and finance. Based in Los Angeles within a mile of the ocean, it is nicknamed the Manhattan Beach Project.
General Matter may have a nondescript name (think Ian Fleming’s Universal Exports) and a secretive air (its red-brick offices are unmarked), but its pedigree is intriguing. Scott Nolan, its founder, is a partner at Founders Fund and formerly an engineer at SpaceX, Elon Musk’s rocket firm. Lee Robinson, a founding member, worked in intelligence. If Mr Thiel and Mr Musk had a clandestine love-child, General Matter would be it.
It hopes to take advantage of a Department of Energy (DOE) programme, dating back to Mr Trump’s first term, to create high-assay, low-enriched uranium (HALEU). That is nuclear fuel enriched to between 5% and 20% for the small modular reactors (SMRs) that one day, it is hoped, will help power the AI revolution. Low-enriched uranium (LEU), used in today’s nuclear-power plants, is sub-5%. Russia currently provides America with 35% of its nuclear fuel, including almost all its HALEU, under a sanctions waiver that expires in 2028. Hence the quest to find alternative fuel sources.
General Matter refuses to disclose what enrichment technology it is working on, and in what state the enrichment plant will be located. Mr Nolan says only that, like SpaceX, it is going back to first principles, and that its engineers range from 20-somethings to nuclear-industry veterans of retirement age.
Founders Fund and the American government treat General Matter like a princeling. Almost a year before it was incorporated in 2024, it had caught the federal government’s eye. In early 2023 the DOE named it as part of a 70-strong HALEU consortium. Late last year it was one of four firms to win a spot to compete for a $2.7bn contract to supply HALEU to the government, as well as one of six in the running for an LEU contract worth up to $3.4bn. That was granted at the tail end of the Biden administration. The firm expects nuclear innovation to have even more support under Mr Trump.
Competitors, who for a time knew little about the firm except for an address at Founders Fund’s offices in San Francisco, were dumbfounded at how it could come out of nowhere promising such complex innovation—and convince the government to take it seriously. “They won’t be spinning centrifuges in Mr Thiel’s office, that’s for sure,” joked one. As for it using SpaceX’s engineering principles, he quipped: “It’s one thing to have a rocket blow up. In the nuclear industry you don’t really do it that way.”
Yet many have missed out on making money by failing to take Mr Thiel and his acolytes seriously. One of the early backers of Facebook and SpaceX, Mr Thiel has made a $16.5bn fortune by going against the grain. In 2016 he was the first prominent figure in Silicon Valley to support Mr Trump. Although he did not make an endorsement this time, he helped bankroll the early political career of J.D. Vance, a former colleague, who is now America’s vice-president.
Moreover, Mr Thiel and Founders Fund have a history of incubating other firms that aim to do highly sensitive work in support of America’s national security, using hitherto unproven technology. One is Palantir, a big-data firm set up in 2003 to help America fight terrorism that is now worth $180bn. The second is Anduril, a defence-technology startup last valued at $14bn that is disrupting America’s military-industrial complex. (Former employees of both companies, as well as of Mr Thiel’s investment firms, have joined the Trump administration.)
Trae Stephens, a partner at Founders Fund and co-founder of Anduril, casts General Matter as the third in the trilogy, building energy technology to help America compete in the energy-hungry AI race against China: “We are getting absolutely lapped by China in building new nuclear capabilities.” He says Founders Fund is also looking into on-shoring other sensitive supply chains, such as extreme ultraviolet light lithography to create state-of-the art semiconductors.
There are big hurdles ahead, though. The first is a chicken-and-egg problem. Unless there is a HALEU supply chain in place, it is hard to build advanced nuclear reactors that rely on the fuel. Yet until it is clear that the new reactors have a future, making HALEU is a highly speculative, capital-intensive bet. The DOE’s support is aimed at overcoming that dilemma. On April 9th it said it would provide a first batch of HALEU to some SMRs. But it cannot guarantee the long-term viability of the reactors, nor of a domestically produced uranium supply chain.
The second is competition. The three other companies picked by the DOE to compete to supply HALEU are well-established. They include American subsidiaries of two European nuclear-fuel providers, Urenco, a consortium made up of the British, Dutch and German governments, and Orano, a mostly state-owned French firm. Their American counterpart is Centrus Energy, a listed firm that was once part of the government. In 2023 Centrus produced 20kg of HALEU, the first output in America in 70 years. General Matter hopes that its technology will make HALEU in bigger quantities at lower cost. Yet, as its rivals point out, it has not yet formally sought a licence from America’s Nuclear Regulatory Commission, which can take years to approve.
Margaret O’Mara, a historian of Silicon Valley at the University of Washington, notes the incongruity of libertarians like Mr Thiel harking back to a golden era of government intervention in the economy at the height of the cold war. She calls it the “Space Age, brought to you by Ayn Rand”. And yet she notes that Silicon Valley got its start building computers for atomic warheads. Then the anti-nuclear “peaceniks” took over in the 1960s, starting the drift away from national-security tech. If Mr Thiel has his way, it will come full circle. With luck, it will not end with more nuclear bombs.