I would expand on what rook said that Thiel very much is not a big fan of the book. He is a big fan of an imaginary version he dreamed up.
A common problem in fiction, especially visible in the first Star Wars trilogy, is to make the villain look cool and efficient to amp up their threat, and then see people root for them.
But it's super not the case for Lord of the Ring. Saruman is shown to be a pathetic fool at every corner. You can't be a fan and have not noticed that. Sauron fare little better ; he is shown to be baseline competent at some things, but he is the living embodiment of "the thing in the way of your project is who you are".
The conclusion is that it's most likely Thiel did not actually read the book. Maybe he skimmed them, maybe he only read the summary. But anything important in it flew past him, despite Tolkien not being exactly subtle !
My experience is that almost all these cases are effectively "ChatGPT are fixing my attention problems" (not necessarily full ADHD, just people feeling it's easier with an impulsion no matter how random) For me, it's worth paying attention too, but more in the sense "what does it reveal in people ?"
Edit : also, one of his example :
2005 spell checkers find all of these reasonably well.
(and, in fact, the only two reasonable examples he give is the innocence project - but it's an attention span thing - and the full text indexing one which is the exact use case LLMs were developped for and is inherently non generative)