A Thiel-backed startup unveiled a futuristic city in Bhutan. His Dragon King builds it without them

After a startup shared its idea for a Shangri-La technology with the royal government of Bhutan, the kingdom rejected the project. Now, he’s preparing to announce his own consciousness-focused “metropolis.”

_{With Sarah Emersonthe Forbes staff and Iain MartinForbes Staff}

IIn 2021, South African-American businessman Art Finch began pitching government officials in the Himalayan kingdom of Bhutan to an idea: turning Gelephu, a sleepy, picturesque town on its border with neighboring India, into an experimental, “eco-industrial” map . city.

The tiny city, he argued, was ideally placed to become a hub for free thinkers and innovators from around the world who would bring their knowledge and wealth to Bhutan. It would be a commercial paradise of green architecture and sustainable industry. More importantly, Finch’s startup, which is backed by one of billionaire Peter Thiel’s VC firms, had secured letters of intent from 19 foreign tech companies, including lab-grown unicorn Diamond Foundry, British drone startup Dronamics and Finnish company carbon sequestration Carbo Culture to become tenants. in the city of Yung Drung, which it claimed would provide an economic jolt to a country still emerging from decades of self-imposed isolation.

“21st century development in the last Shangri-La,” said the utopian project his website.

Now, that future has arrived. Forbes has learned that “Dragon King” Jigme Khesar Namgyel Wangchuck will officially announce a “megacity” in a royal address on Sunday, according to four sources with knowledge of the matter. The proclamation will coincide with Bhutan’s 116th National Day, a public holiday hosted in the capital Thimphu. The event was originally scheduled to be held symbolically in Gelephu, a town of less than 10,000 people, but had to be moved back to Thimphu due to a lack of infrastructure and accommodation for a number of international visitors.

Neither Thiel nor any of the project’s Silicon Valley investors appear to be involved. And Finch thinks the Bhutanese government got their idea. “Leadership under the influence of foreign advisers is now reshaping a different and not quite sustainable project,” he said. Forbes.

“It is ‘my prayer’, as the Bhutanese say, that the not entirely happy people of Bhutan will have the opportunities they deserve in a country with a fully realized version of [megacity] work. I don’t believe this project is shaping up that way at the moment, and I pray that dialogue can improve it.”

The prime minister’s office and Bhutanese government representatives did not respond to requests for comment.

Although the royal metropolis bears significant similarities to the startup’s vision, it will proceed as an entirely sovereign endeavor. The “Bhutan City of Mindfulness,” as it is known to the government, is being designed by McKinsey & Company and Singapore-based urban planning consultants Cistri, according to two sources close to the project (neither firm responded to a request for comment). These plans envision a dense urban center supported by industry pillars such as wellness, tourism, research and development, and cryptocurrencies. It would also be infused with Buddhist principles that underline Bhutan’s national religion: any industries that allow killing, such as weapons manufacturing, would be banned.

But against a backdrop of failed government projects, such as the $1 billion “Education City,” which has been quietly transformed into a dominant bitcoin mine, Mindfulness City could face a strong backlash from Bhutan’s nearly 800,000 citizens. Although the project has yet to be officially announced, it remains an open secret among Bhutanese, and fears of government land grabs and displacement of farmers in Gelephu have already taken root, according to several Bhutanese. Sources familiar with Mindfulness City said the king is actively trying to avoid the perception that families will be forcibly relocated to make way for the project.

These fears are rooted in the dark history of Gelephu’s recent past, where in the 1980s and 1990s the Bhutanese government forcibly expelled more than 90,000 of the region’s ethnic Nepali population. Many now still live as refugees in Nepal, India or have resettled around the world. The non-profit Human Rights Watch claims that the kingdom’s prisons still hold more than 30 prisoners held on political charges for more than 30 years.

Yung Drung City was founded in 2020 by Finch, a serial entrepreneur who has family in Bhutan and has lived there periodically for the past two decades. He envisioned the project as “charter city,” a type of semi-autonomous community whose ideology — which promotes self-determination and hyperlocal governance — found a ready audience in Silicon Valley where anti-regulation sentiment helped spark a city ​​building movement. “I have spent most of my adult life creating a model of an independent city to unlock human flourishing,” he said. Forbes.

That year, he raised about $1 million in seed capital for the city from Pronomos Capital, a Peter Thiel-backed venture capital firm, as well as additional funding from former child actor-turned-bitcoin evangelist Brock Pierce. Neither Thiel nor Pierce responded to a request for comment.

Charter City proponents often point to the success of Shenzhen and Dubai, where this model has been implemented on a large scale. The trend has also spawned a constellation of tiny startup communities, such as the Honduran crypto community Persperaone City powered by Binance in Nigeria and Akon Cityfounded by Senegalese-American singer Akon and inspired by Wakanda.

Few venture capitalists were as eager to fund charter cities as Thiel, who was among early supporters of the Seasteading Institute, a non-profit organization that predicted that autonomous societies would live on fleets of floating cities on the ocean. Founded by Patri Friedman, the founder of the Seasteading Institute and grandson of Nobel-winning economist Milton Friedman, Pronomos invests “in the cities of tomorrow,” with advisors including AngelList’s Naval Ravikant and entrepreneur Balaji Srinivasan.

Friedman confirmed Forbes that in 2020, he and a Thiel representative met remotely with Bhutan’s Minister of Economic Affairs to discuss the town of Yung Drung. Yung Drung City’s partners continued to communicate with officials throughout 2022, a source close to the startup said.

But after a promotional video circulated widely on Facebook in 2023 describing the project’s desire to work with officials to develop a special economic zone, or “SEZ,” where the city would be located, the Bhutanese government publicly distanced itself from the city. Yung Drung. In one April statement, Bhutan’s cabinet secretary claimed that “these materials falsely portray the existence of a partnership” and said the government does not support or have an official relationship with Yung Drung City. (In a statement posted on Facebook, the startup denied (that the materials said the government was involved and instead “share the simple truth that we developed this idea and have been promoting it for years.”)

“I have spent most of my adult life creating a model of an independent city to unlock human flourishing.”

What the government has not disclosed is that King Wangchuck has pitched the idea for Mindfulness City to investors, according to two sources familiar with his business. In April, he traveled to New Delhi to meet with Indian President Droupadi Murmu and Prime Minister Narendra Modi. They discussed the establishment of a Gelephu Special Economic Zone and a long-term rail link between the two countries, local media reported.

With Yung Drung City’s investors seemingly left out of the royal project, it’s unclear who will foot the bill for Mindfulness City. Project developers worry that attracting foreign direct investment without substantial incentives will be difficult, according to sources with direct knowledge of their plans. But some of the world’s richest and most powerful people have ended up in Bhutan’s orbit. In November, during his second trip to New Delhi, the king held court with Indian billionaire Gautam Adani, founder and chairman of the Adani Group, to discuss development opportunities in Bhutan. Adani shared a photo from their meeting on Instagram but did not respond to a request for comment.

American venture capitalist Tim Draper’s name has also come up in discussions with the palaces, according to various sources familiar with the king’s personal network, and his technology incubator, Draper Startup House, has previously worked with local entrepreneurship programs. Draper did not respond to questions about his ties to Bhutan. Another scion of the Italian House of Medici, Prince Lorenzo de’ Medici, who calls himself a scion of the Italian House of Medici, is another member of this entourage, saying Forbes that he is close to the royal family and has advised them on investment opportunities. Medici said, however, that “he has not yet been approached about the construction of the megalopolis project.”

The metropolis is one of Bhutan’s last bets for a more secure future. As the country struggles to modernize its economy and stem the tide of mass immigration — which currently threatens to completely offset new population growth, according to national immigration data — its government has pursued a series of projects it claims will boost its economy, put people to work and prevent an exodus of young people who are increasingly leaving for better opportunities abroad. Part of that effort included the kingdom’s cultivation of a massive cryptocurrency portfolio, first reported by Forbes, and a partnership with Singaporean bitcoin mining giant Bitdeer. Last month, Forbes it also identified several secret government bitcoin mines whose locations had never been made public.

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