Palantir Technologies is a relatively small company, with only around four thousand employees but its reach is huge. Climate change, famine, immigration, human trafficking, financial fraud, customs enforcement at ICE, the future of warfare - Palantir is at the center of many events that you see in the news. Under President Trump, Palantir has become an essential tool in American wars abroad and policy at home. Yet it has stayed largely under the radar.
Its stock rose around 500% in the past 5 years. But it had a poor 2026 although it has risen again in the past few days. Palantir was one of the most expensive stocks on the market when its decline began, and even after its sell-off, it is still expensive at over 100 times forward earnings. Many think it will follow the same path as Nvidia, another company that benefited from the rise of artificial intelligence. And yet, unlike Nvidia, many people don’t know what Palantir does. There was a funny tweet that illustrated this point:
“If someone held me hostage and asked me to explain what Palantir does, tell my family I love them…”
The company was founded by Peter Thiel (first major Facebook investor and founder of PayPal) and Alex Karp in 2003. Alex Karp is the chief executive officer. It was started after the 9/11 attacks in the US and was financed in part by In-Q-Tel, the CIA’s venture capital arm. A number of secret services now use Palantir, including the Mossad. All six branches of the U.S. military has deployed its technology. Palantir clients include the FBI, the IRS, and the National Institutes of Health, or NIH. It has become a major defense contractor.
Alex Carp has a very unusual background for someone who is a big name in Silicon Valley. He grew up in Philadelphia in a very left-wing household, the son of a Jewish pediatrician and a black mother who's an artist. Much of his childhood was spent going to anti-war protest and he used to describe himself as a neo-socialist. He's biracial and he identified very strongly with his black heritage. He was someone who was sensitized to injustice both at home and abroad.
Karp majored in philosophy at Haverford. He went on to earn a law degree from Stanford University and a doctorate in social theory from Germany’s Goethe University, Frankfurt. He had no desire to pursue a career in academia, and when Peter Thiel, a law school classmate, asked Karp in 2003 if he would be interested in joining a start-up that was building software to fight terrorism, he jumped at the opportunity. Not long thereafter, Karp became Palantir’s CEO.
Under Karp, Palantir became a dominant force in data analytics, a multibillion-dollar enterprise with swank offices around the world and an aura of intrigue that set it apart from other Silicon Valley companies. The company went public in 2020 and officially made Karp a billionaire. He became a center of attention at events like the World Economic Forum in Davos, Switzerland. Heads of state were eager to hear his thoughts, and he was in ever-greater demand as a speaker.
What exactly does Palantir do? It works with the raw data that has been collected by the various organizations it works with. Palantir doesn’t collect or store the data itself, and it doesn't sell data. This data collected by the various organizations is messy and riddled with mistakes, can be coded in different languages, such as Python or Java and can be stored in multiple databases that aren’t linked. There is also the problem of dealing with the huge volume of data that is generated now via phones, watches, satellites, automobiles, etc.
Palantir produces software that enables organizations to pool the data they have which is tedious work if done manually. The software cleans up and standardizes the data and turns it into a composite dataset. Customers run queries to find patterns, correlations, trends, connections in that data that would take human analysts hours, days, even weeks to find. They typically work with large organizations that pull in massive amounts of data on a daily basis, like the US Army or Airbus.
It can be customized to reflect the particular needs and habits of mind that guide a corporation or a government agency and can be applied to a broad range of issues. For example, it has been used by the U.S. Centers for Disease Control and Prevention (CDC) to track food borne illnesses; by the German pharmaceutical company Merck KGaA to accelerate the development of new drugs and by the U.S. Securities and Exchange Commission (SEC) to combat insider trading.
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