John Paulson: “A dollar invested at Hebrew University goes ten times further than at Harvard”
The billionaire investor has donated a record $250 million to the Israeli university, citing its academic quality and lower costs. In an interview with Calcalist, he discusses his family ties to Israel, fears of a French debt crisis, inflated AI valuations and why he believes Bitcoin will eventually become worthless.
“The return on a dollar at the Hebrew University is ten times higher than at Harvard,” American-Jewish billionaire John Paulson tells Calcalist in an exclusive interview about his massive donation to the institution.
Paulson arrived in Israel to announce a historic $250 million gift to the Hebrew University of Jerusalem, the largest donation in the university’s history. The funds are intended to support science and medicine. Although Paulson has made previous contributions to the university, none has approached this scale.
“The focus will be on engineering, given the extremely high demand for advanced-level scientists and the limited resources currently available in this field, as well as on medicine and advanced medical studies, including increasing the number of physicians trained in Israel,” Paulson says.
He emphasizes, however, that the donation comes without restrictions. “This is an unrestricted gift. My goal is not to dictate to the Hebrew University where the funds should be allocated. I have full confidence that they will use the money where it is needed most.”
Paulson’s decision to donate to the Hebrew University is rooted in his Jewish identity, personal values, economic philosophy and close family ties. He begins by explaining his broader philosophy of civic responsibility.
“I believe that a society’s highest obligation is to provide education for its citizens. Nothing contributes more to a society’s resilience than educated individuals and students,” he says. “For a student graduating from the Hebrew University, vast opportunities for growth open up. I believe the greatest return I can receive on my investment is through investing in university education for promising students in Israel.”
The Israeli government invests heavily in subsidizing universities. Why is this donation necessary?
“That is a fundamental question, of course: Why is philanthropy needed in this field? The answer is that the Israeli government faces a multitude of needs and demands. The university’s resources are far more limited and cannot meet the demand for the education it is capable of providing.
“This donation will focus on new engines of economic growth, such as engineering, computer science, electrical engineering and artificial intelligence. I want to help the university meet this demand.”
Why the Hebrew University specifically?
“My focus on the Hebrew University does not mean that I do not value the Technion, Tel Aviv University or Ben-Gurion University. They are all very strong. However, one must focus in order to generate the greatest possible impact.
“The Hebrew University is a leader in Israel. It was founded in 1925, and Albert Einstein was among its founders. Since then, it has achieved remarkable success in terms of Nobel Prizes, other prestigious awards, patents and the caliber of its graduates. I am investing in an institution of the highest quality.”
You also have a personal connection to the university.
“My sister, Theodora Bar-El, arrived in Israel in 1968, shortly after the Six-Day War, and fell in love with both the country and the Hebrew University. Although she was accepted to Harvard, she chose to remain in Israel and study at the Hebrew University for the rest of her life.
“That was my first introduction to the university. I visited Mount Scopus for the first time when I was 13. My nieces and nephews, their spouses and my brother-in-law all studied at the Hebrew University. It is an important institution for our family. That is how I came to know and take an interest in it.
“This donation also represents the continuation of a family legacy. My sister passed away this year, and one of the university’s buildings is named after her family, the Bar-El Building.”
Paulson’s belief in education also led him to donate approximately $400 million to Harvard University about a decade ago. That gift remains the largest single donation the institution has ever received. His decision to direct more of his philanthropy toward an Israeli university reflects a broader shift in his approach to giving.
“I made a decision to shift my philanthropy toward Jewish causes in general, and toward Israel in particular. Israel is currently facing many challenges. There is anti-Israel sentiment and a rise in antisemitism globally. I decided it was important to demonstrate support for Israel, and an incredible way to do that is by supporting Israel’s leading university.”
Would you donate to Harvard again?
“Look, beyond the quality of education at the Hebrew University, it is an exceptionally productive institution in terms of return on investment. Without meaning to disparage other universities, the average cost per student at the Hebrew University is one-tenth the cost of a student at an Ivy League university.
“The Hebrew University is world-class, ranked among the top 100 universities globally. You receive the same caliber of academic education for a tenth of the price. A single dollar here buys what would cost me ten dollars in the U.S. Consequently, I feel that the return on my investment is significantly higher here.”
Your investment in education is inspiring, but some might argue that the challenge begins with the educational foundations of the Haredi and Arab populations.
“The Hebrew University is open to all students, including Arabs and the Haredi community. In recent days, I’ve discussed with the university’s leadership the importance of expanding university education within the Haredi sector, an area the Hebrew University is actively focused on.
“The Haredi community in Israel possesses immense intellectual resources. If members of this community pursue a general curriculum, it would significantly expand Israel’s knowledge base and productive capacity.
“In my view, there are also positive developments in this area. There is currently a company making headlines called Decart. It was founded by three young men, two of whom are Technion graduates. One of the founders is Haredi, Moshe Shalev. He met his partners in the army, presumably in Unit 8200, and now it appears that Amazon is set to acquire the company for $7 billion.”
Calcalist was the first to report on the potential Amazon acquisition.
“This is a small example of how important it is to integrate the Haredi community into Israel’s economy and business sector. In the U.S., this integration is happening: Haredim pursue both Jewish and general studies. It’s not an ‘either-or’ situation.”
Debt, technology valuations and gold
Paulson became a financial legend by betting against the U.S. mortgage market ahead of the 2008 financial crisis. His fund reportedly earned approximately $15 billion from the wager, while Paulson personally made about $4 billion. Although he has not replicated that level of success since, his views on financial markets remain closely watched.
“Globally, my biggest concern is a debt crisis in France,” he says. “We previously experienced a debt crisis in Greece, a country much smaller than France, and that crisis caused instability throughout the entire eurozone. France is larger than Greece. Should a debt crisis occur there, containing it would be extremely difficult.”
France’s fiscal position helps explain his concern. Its budget deficit has exceeded 5% of GDP, while its debt-to-GDP ratio is around 120%. Paulson argues that France faces constraints that differ from those confronting the United States.
“The U.S. also has a high debt-to-GDP ratio, around 100%, and a large deficit, about 6%. But the U.S. economy is growing, with projected growth of roughly 2.3%, which could help reduce the debt-to-GDP ratio. Furthermore, the U.S. borrows in a currency it issues itself. Consequently, it always has the, albeit unattractive, option of financing itself by printing money, through the central bank’s purchases of U.S. government bonds. It has employed this practice repeatedly since the financial crisis.”
And what about France?
“France lacks this capability. It does not borrow in its own currency, but rather in the European currency, the euro. Its national central bank cannot independently issue euros to purchase French government bonds. Consequently, France is compelled to borrow from the markets.
“Its borrowing requirements are immense, amounting to approximately $400 billion over the coming years. It will be difficult for the markets to absorb this debt. Yields on French bonds are reaching historic levels relative to those on German bonds.”
What is the solution?
“Cutting government spending or raising taxes. However, France already imposes very high tax rates. Further tax hikes could stifle the economy. On the other hand, previous attempts to cut spending have consistently triggered unrest and turmoil. Recent presidents have seen their popularity plummet, and their political tenures effectively end, because they attempted to implement such cuts.
“France is currently gripped by unrest, and there is no talk of spending cuts. Rather, the public is demanding an increase in spending.”
What is the second bubble that concerns you?
“The high valuations of American technology and artificial intelligence companies. While these high valuations might be justified in some cases by rapid, robust growth, there are too many companies with inflated valuations that are simply ‘riding the wave’ without any underlying economic foundation.”
What do you think might happen?
“I believe current valuations are somewhat ahead of the underlying economic fundamentals. Therefore, given rising bond yields, high valuations and the volume of debt raised, I expect to see a market correction in the U.S. in the coming years.”
The other side of Paulson’s concerns about debt is his long-standing faith in gold. His exposure ranges from direct investments through exchange-traded funds to holdings in gold-mining companies. Although he declines to predict a specific gold price, he expects the metal to continue appreciating.
“I think the U.S. will struggle significantly to cope with current inflationary pressures, so I expect gold to continue appreciating. As for the euro, the question is more existential: Will it survive in the long term? If the answer is no, I believe demand for gold will rise dramatically.”
Although Paulson is among those who fear that confidence in fiat currencies could erode, he is a staunch opponent of Bitcoin.
What is the actual difference between Bitcoin and gold?
“I’ve just returned from a visit to the Israel Antiquities Authority, where I saw its coin collection. It has gold coins dating back to the Byzantine Empire and even earlier. Gold has always been a global currency.
“Bitcoin is nothing. It is just like all other cryptocurrencies. While its supply is limited, it is a limited supply of nothing. Its value is supported solely by demand. I estimate that 99% of the cryptocurrencies issued since this craze began have effectively become worthless. I believe that, over time, the same will happen to Bitcoin.”
And what about gold?
“If you lose faith in paper money, whether in the dollar because so much is being printed or in the euro because of instability, where would you feel safe placing your long-term savings? In gold, which has served as currency throughout recorded history.
“And right now, we see that demand for gold is not coming just from the private sector. It is also coming from the public sector, from central banks. The demand for gold as an alternative currency will persist.”
Israel’s economy and political future
You seem well-informed about what is happening in Israel. From afar, what can you tell us about the elections?
“I am an American citizen, so I cannot vote in Israeli elections. It is important for Israel to be united, to establish shared goals and objectives, and to work together. I hope that whichever party wins the election will form a government focused on uniting the country.”
As an investor, although you do not currently have financial investments in Israel, how do you view the Israeli economy?
“The achievements of the Israeli economy are very impressive. It is a very strong economy in many respects. Everyone knows that Israel is a leader in technology, but it also leads in agriculture, science, pharmaceuticals, biotechnology and many other fields.
“Israel’s GDP per capita is higher than that of France, Germany or the U.K., and this gap is set to widen because Israel is growing faster than those countries.”
How do you explain that?
“Israel leads because it is a knowledge-based economy, a result of decisions made here a long time ago. I want this resilience to endure, which is why I support universities that strengthen and expand the nation’s knowledge base.”
What should Israel improve in its economy?
“It is important for Israel to improve its relations with other countries and markets around the world. The more open you are to a growing number of markets and nations, the stronger your economy becomes.”
How can Israel improve its relations with other countries? Even in the U.S., where you come from, its standing is deteriorating.
“Israel needs to focus on its positive aspects, particularly its economy. Unlike its neighbors, Israel is a democracy and an open society. It respects all religions, and every faith enjoys religious freedom here. The economy is vibrant, and the country is rich in art, culture and history.
“This is another reason for my contribution. I want to draw attention to Israel’s positive side, so that people gain a better understanding of what Israel is and are encouraged to visit.”
You are surely aware that many in Israel fear the upcoming elections could alter the country’s character as an open society that holds academia in high regard.
“I’m not sure. The truth is, I’m not very close to local politics.”
