A profile on Alex Karp and Palantir

Alex Karp runs Palantir, a big data company. He is a philosopher by degree and now works in the cutting edge of AI and data-analytics. Both him and his company have not been without controversy. What does Palantir do? Does the use of data restrict civil liberties? If so, how? How is he making money?

Palantir can track data for all sorts of purposes, including terrorism, disaster response, and human trafficking

Palantir Technology, a data analytics and surveillance company, has had an almost mythical status in Silicon Valley. Now that the firm has gone public, its tools can seem especially tempting to many different industries in America. The company’s technology analyses data from many different information sources, finding potential trends, patterns, or relationships, and turning them into visualised maps and histograms that can be used to make informed decisions. It can track data for all sorts of purposes, including terrorism, disaster response, and human trafficking.  According to a former JPMorgan Chase staffer, they’ve saved the firm hundreds of millions of dollars by addressing issues from cyber fraud to distressed mortgages.

Yet, for the most part of its lifetime, its operations have always been shrouded in secrecy. Founded in 2004 by Alex Karp and billionaire tech investor Peter Thiel, it has links with America’s Central Intelligence Agency (CIA) who was an early investor through its IN-W-Tel venture fund. Records show that Palantir has only 125 corporate and government customers, which is quite a small customer base for a firm that big. In addition, two-thirds of its income comes from its top 20 customers. Most of them are government contracts –  it recently signed a contract with the United States Army to develop a new intelligence interpretation platform, worth an estimated $823 million – which raises many questions in its own right. More interestingly, despite filing for its initial public offering (IPO) last month, Palantir has extremely limited disclosure, releasing only six trailing quarters worth of financials.

Palantir has lost money every year, posting net losses of about $580 million in 2018 and 2019

However, behind the glitz and the glory, somehow Palantir has struggled to live up to its reputation. Although it reached a valuation of around $21 billion on the New York Stock Exchange, the company has never been profitable. Since its founding, Palantir has lost money every year, posting net losses of about $580 million in 2018 and 2019. Palantir’s product is extremely expensive and the company has a very high overhead cost – accounting for 105% of their revenue last year. Its governance structures are also one of the most aggressive, with the founders still having effective control of the company despite owning a fraction of the shares, due to a unique feature of the voting system.

The issue with Palantir is not with its technological abilities but it being used as a political and ideological tool by governments to facilitate their policies.  The most controversial to date is the firm’s partnership with Immigration and Customs Enforcement (ICE) that is worth up to $42 million, as it provided digital profiling tools to collect and store detailed information on undocumented immigrants in advance of deportation raids. Its complicity in Trump’s policy of separating families and placing people in border detentions centres has led Palantir’s own employees to sign a petition asking management to redirect profits from ICE contracts to a non-profit charity.

Palantir was developed shortly after 9/11 to predict future terrorist attacks – in the company’s own words, Palantir “helps institutions protect liberty”

Karp claims that Palantir’s mission was always to defend American interests. He has slammed other tech giants like Google from withdrawing from a Pentagon partnership called Project Maven, accusing the company of risking American lives. He brushes aside the threat to civil liberties, defending Palantir’s involvement in America’s defence and intelligence agencies; in fact, Palantir was developed shortly after 9/11 to predict future terrorist attacks – in the company’s own words, Palantir “helps institutions protect liberty”. He has also claimed to have walked away from customers that they did not trust to use their technology with the right motivations, despite having little evidence that he has done so. US Representative Alexandria Ocasio-Cortez has pursued an investigation on Palantir’s disclosure practices and its lack of transparency on key areas of risk, such as Palantir’s work with foreign governments as well as on data protection. However, forcing Palantir to be accountable seems to be miles away, with the current conditions of America’s political landscape.

A lot remains to be seen how Palantir will continue to manoeuvre in the public sphere, with an increase in political activism, especially in Silicon Valley, where tech workers have staged walkouts or conducted petitions to protest ethical concerns. But one thing is for sure: Palantir is here to stay for the considerable future, especially in an increasingly polarised, data-crazed world.