How Palantir’s tech patriotism became a multi-billion dollar idea

In this weekly series, CNBC takes a look at the companies that made the inaugural Disruptor 50 list 10 years later.

Palantir is no stranger to politics. The data mining and software company got its start with government contracts, and 19 years after its founding, Palantir’s government work is still at the heart of its business.

In its early days, Palantir’s business came directly from the FBI, the NSA, and even the CIA, whose venture capital arm In-Q-Tel was an early backer of the company. CEO and co-founder Alex Karp is a self-proclaimed American patriot. For Karp, data and defense are intertwined, and his company’s contracts with government agencies reflect a commitment to leveraging technology to support the West. The company’s first splash was said to have helped find Osama bin Laden more than a decade ago, and this year Palantir began working for Ukrainian military operations.

In between, the company’s patriotism has drawn some criticism, internally and beyond. Palantir’s work with the United States Immigration and Customs Enforcement, or ICE, for example, has infamously sparked a flurry of internal employee petitions, sparking national debates about the role of technology in the United States and the boundary between protecting civil liberties and facilitating the duties of government.

Karp founded the company with well-known conservative tech investor Peter Thiel, and the two have publicly argued over politics and technology. In an interview at the Aspen Ideas Festival, Karp commented on the division within Palantir’s management. “Look, I think one of the problems in this country is that there aren’t enough people like Peter and I…we’ve been fighting for 30 years,” he told Andrew Ross Sorkin of CNBC. Yet they run a business well enough together to consistently win government contracts around the world, the successes of which have led to private-sector contracts with companies like BP, Merck and Sanofi.

Shortly after reports surfaced that Palantir had helped track down bin Laden, CNBC rolled out its first Disruptor 50 list in 2013, and Palantir would remain a fixture on the list until it was made public. via direct list in 2020. Palantize the shares are up about 12.6% since their IPO, but for 2022 the shares are down more than 55%.

While much of its business is still aimed at government agencies, work beyond that is growing: Commercial revenue rose 120% in its last August earnings report, while business customers in United States increased by more than 200%. Wall Street analysts covering the stock are split: a quarter have a “buy” rating, a quarter expect an underperformance and the other half have rated Palantir stock as “hold”.

What Palantir actually does for its clients, American or international, public or private, often remains unclear. From the outset, the company’s objectives were secret, befitting a DOD or FBI contractor. However, even as a publicly traded company with a market cap of $16.7 billion, Palantir’s work remains opaque. Karp was the first Western CEO to travel to Ukraine and meet President Volodymyr Zelenskyy during this year’s dispute, and in his earnings call, Palantir’s director of business affairs and legal counsel Ryan Taylor confirmed society is “at the forefront of the most important issues”. around the world, from the war in Ukraine to the fight against famine and monkeypox.”

But it’s unclear exactly how Palantir handles these issues.

In a CNBC interview at this year’s World Economic Forum in Davos in May, Alex Karp estimated there was a 20-30% chance of a nuclear war in Ukraine. Although a relatively isolated prognosis at the time, Karp doubled down on the possible dangers ahead in a September interview on “Squawk Box,” and in doing so, he underscored his own company’s position. to help Ukraine defend against Russia: “Software plus heroism can really kill the giant.”

Palantir CEO Alex Karp on stock price, big tech and the threat of nuclear war

As secretive as it may be, Palantir has been clear about a major linchpin of its CIA roots: healthcare.

During the height of the Covid-19 pandemic, Palantir assisted in the national and international deployment of vaccines. It has partnered with the CDC, NIH, and FDA in the United States, as well as the NHS in England. In the private sector, he currently works with the healthcare sector of Japan’s Sompo, as well as with Merck and Sanofi.

Chief Operating Officer Shyam Sankar told CNBC in August that the company’s work spans the entire healthcare value chain. It’s about “working with government agencies to help them distribute vaccines efficiently, connecting with the pharmaceutical companies and biomanufacturing processes that create them, driving the hospital operations that put those needles in your arms and driving health care outcomes, clearing the backlog in the wake of Covid.”

Palantir will likely remain as secretive as he began, and Karp, committed to his nuanced politics and patriotism, will likely remain upfront about both. For 19 years, Palantir’s data mining and analysis software has been the subject of notorious successes and protests. Despite the backlash, his technology wins hundreds of millions of dollars in contracts every year, employed by the world’s biggest geopolitical players to move chess pieces around the world.

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