There's libertarians, and then there's libertarians. Thiel is a huge fan of Hans Hermann-Hoppe, who writes things like:
"In a covenant concluded among proprietor and community tenants for the purpose of protecting their private property, no such thing as a right to free (unlimited) speech exists, not even to unlimited speech on one's own tenant-property. One may say innumerable things and promote almost any idea under the sun, but naturally no one is permitted to advocate ideas contrary to the very purpose of the covenant of preserving and protecting private property, such as democracy and communism. There can be no tolerance toward democrats and communists in a libertarian social order. They will have to be physically separated and expelled from society. Likewise, in a covenant founded for the purpose of protecting family and kin, there can be no tolerance toward those habitually promoting lifestyles incompatible with this goal. They – the advocates of alternative, non-family and kin-centered lifestyles such as, for instance, individual hedonism, parasitism, nature-environment worship, homosexuality, or communism – will have to be physically removed from society, too, if one is to maintain a libertarian order."
This quote is from Hoppe's "Democracy: The God That Failed", which Thiel has referenced before. The overall thesis there is that economic freedom is the cornerstone of libertarianism, and it's fundamentally incompatible with democracy, so libertarians have to explore other options. It specifically promotes monarchy, on the basis that a monarch is more like a business owner with a vested long-term interest.
You might argue that this isn't really libertarianism - indeed, many libertarians don't consider Hoppe to be one. This is basically proto-neo-reaction, at the point where it still hasn't explicitly rejected libertarianism altogether. But regardless of where you draw the line, this all is the evolution of Murray Rothbard's strain of libertarianism, after it moved away from social liberalism towards paleoconservatism - it's not just some random people coming and declaring their politics to be "libertarian" out of the blue. Nor is there any shortage of ex-libertarians in NRx circles, so it's clearly a common path, not unique to Thiel.
Needless to say, the libertarian paradise described above could use something like Palantir to implement the "covenant".