How the PayPal Mafia Looks Set To Dominate the New Administration

With Elon Musk’s appointment to lead the new advisory Department of Government Efficiency (DOGE) and David Sacks’ role as cryptocurrency and artificial intelligence (AI) czar in the incoming Trump administration, Silicon Valley’s influential “PayPal Mafia” has secured substantial power in the new administration.

The term “PayPal Mafia” was first coined by Fortune magazine in 2007 to describe the influential former PayPal founders and managers who went on to establish or invest in numerous successful technology companies. This informal network has since evolved from Silicon Valley power players to potential architects of American policy.

Key Takeaways

• Certain members of the PayPal Mafia—a network of early PayPal founders and managers—have emerged as power players in Trump’s second administration.
• These include Peter Thiel, Elon Musk, and David Sacks.
• They will try to steer American policy toward less regulation of tech, pro-cryptocurrency policies, a less aggressive antitrust stance, and more cuts in major parts of the American government.

What Is the PayPal Mafia

PayPal Holdings Inc. (PYPL) emerged during the dot-com boom of the late 1990s, where it filled a need to make online payments more efficient. As a natural complement to online auctions, the company was acquired by eBay Inc. (EBAY) in 2002 for $1.5 billion. The sale dispersed a group of entrepreneurs who would go on to help reshape the tech world before venturing into politics.

Their experience building PayPal revealed to them what they say was overregulation and bureaucratic resistance, helping to shape the libertarian-leaning political philosophy that they say now informs their approach to government (despite the numerous government contracts among each of the companies they’ve helped form).

This network extends beyond just the original PayPal founders and employees. Their broader web of influence includes figures like Jim O’Neill, former CEO of Thiel’s foundation, picked by Trump to be deputy secretary of Health and Human Services; Trae Stephens, a Founders Fund partner being considered for deputy secretary of defense; and Michael Kratsios, Thiel’s former chief of staff, who is handling tech policy during the transition.

Even Vice President-elect JD Vance, who worked at Thiel’s Mithril Capital and whose political career has been strongly encouraged and backed by Thiel, is an extension of this network’s growing political influence.

Peter Thiel

Thiel, PayPal’s co-founder and an early Facebook investor, went on to create the venture capital firm Founders Fund, as well as Palantir Technologies Inc. (PLTR), while slowly emerging as one of the most influential figures in conservative politics. As an early supporter and adviser to Trump, the libertarian-leaning Thiel has positioned himself as a bridge between Silicon Valley and conservative politics.

As an investor in many tech companies and bitcoin, Thiel would benefit from reduced regulation of the tech sector and pro-crypto policies. He also supports free trade, tighter immigration, and a more confrontational stance toward China.

Elon Musk

While Elon Musk’s relationship with political figures has grown into making him one himself—he spent hundreds of millions on former Donald Trump’s 2024 campaign, gave speeches on his behalf, and now is threatening Republicans who disagree on certain policy prior direct, with his active campaigning for Donald Trump underscoring his political engagement. As the CEO of Tesla (TSLA), X (formerly Twitter), and SpaceX, Musk already wields significant influence in social media, electric vehicles, space policy, and artificial intelligence. In addition, his companies have received billions of dollars in U.S. government contracts in recent years, giving him a vested interest in shaping policy.

Musk’s public advocacy for reducing government spending and increasing transparency has aligned with his political activities, leading Trump to appoint him as co-leader of DOGE alongside Vivek Ramaswamy. (Musk, notably, is also an outspoken supporter of the Dogecoin cryptocurrency, which shares the same acronym.) Musk has pledged to slash $2 trillion from the federal budget. However, DOGE is not an official government department, Congress holds exclusive power over federal budgets, and analysts widely view such ambitious cuts as unrealistic.

David Sacks

Sacks, PayPal’s former chief operating office (COO) and a longtime venture capitalist, has emerged as a key voice on technology policy. His expertise in tech and finance makes him particularly influential in discussions about cryptocurrency regulation and tech industry oversight, particularly about AI. Trump named him his new “AI and crypto czar.”

Sacks, also an investor in Palantir and SpaceX, has called for fewer regulations for tech companies and has been critical of traditional financial institutions, suggesting he will push for policies favorable to crypto companies.

The Bottom Line

The convergence of Silicon Valley players at the height of political power marks a new chapter in American governance. These tech industry veterans look poised to shape national policy in the second Trump administration. Their success or failure will likely have a lasting impact on the technology industry, American governance, and the day-to-day lives of the American people. As investors in a range of major tech companies and cryptocurrencies, they also stand to reap massive financial rewards if their policy ideas are implemented.