Thiel, who called himself a "good friend" of the Tesla and SpaceX CEO, made the comment during a debate on stage at UCLA's Internet50 event Tuesday. Thiel was debating Robert Metcalfe, a professor of innovation and entrepreneurship at the University of Texas at Austin, on the question, "Has true innovation stalled?"
Thiel argued in the positive, while Metcalfe took the other side.
"Elon is the counterexample" to the argument that true innovation has stalled, Thiel said, comparing him to former Apple CEO Steve Jobs as a singular great innovator.
"It's a very weird thing where that the go-to story is we have one person who helped develop electric cars and reusable rockets," Thiel said. "But if you tell a young person, 'Why don't you be like Elon?' it's a negative role model where the basic response is, 'Well that's too hard, I can't do that.'"
Thiel said it may be easier to suggest that a young person "start a computer internet company from your college dorm room," which could be an allusion to Facebook's origin story.
Thiel and Musk go way back: Thiel is the co-founder of PayPal, which later merged with Musk's financial services company.