Palantir doesn’t mind if you think it sounds sinister. The surveillance tech company, founded in 2003 by “bigot tech prince” Peter Thiel, is famously named after the seeing stones from JRR Tolkien’s Lord of the Rings – which let anyone foolish enough to wield them see the world, but which drove them to madness in the process.
The name was no accident. Palantir’s critics often point out the potential for its technology to be invasive, or to damage civil liberties. Some note that Palantir’s technology has been used in the planning of strikes in Gaza. Others flag how its bid to join data sources from around the world is all-pervasive.
But the company’s top executives – who tend to share the same populist right views as their boss – would say much the same, though they’d demur on the civil liberties part: the scarier Palantir sounds, the more tempting its wares are to potential customers. The name, the hype, and the criticism all work in the same direction – they make the tech sound fantastic.
Palantir’s technology is even rumoured to have played some sort of unspecified role in tracking down Osama Bin Laden. The company has never commented on such rumours – nor on who started or spread them – but chief executive Alex Karp all but smiles and winks to the camera whenever he’s asked.
Controversy is nothing new, then, for Palantir. Led by democracy sceptic Thiel, who the New York Times has called “the most influential right wing intellectual of the last 20 years”, its executives will largely shrug off concerns as the UK government deepens its relationship with the US company.
Palantir has contracts worth in excess of £1 billion with the UK government, covering extensive NHS data alongside a new five-year strategic partnership with the ministry of defence, to “boost military AI and innovation”.
Palantir is something of a lightning rod, a position its cofounders and its CEO seem to relish. The question is whether there’s much behind the lustre.
Palantir certainly doesn’t mind if its critics think the UK government is signing up with a highly competent company with amazing technology the rest of us don’t understand. That picture, though, is questionable.
Palantir is a company with such a sky-high valuation that it makes Tesla look underpriced. Its executives are closely bonded to MAGA. Its prospects are uncertain. It has gone close to all-in on AI. And as people come to view hype from big tech companies more sceptically, they may start to ask – what does Palantir actually do, anyway?
Palantir was born out of a need for Peter Thiel and a few others to find a life after PayPal. The payment company, which gave the world both Thiel and Elon Musk, had been sold to eBay and its co-founders had moved on. Palantir was an attempt to use the experience from its fraud detection team to commercial uses.
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For a time, PayPal was so easy to defraud that it was essentially little more than a scheme to give investors’ money to criminals. Especially under Musk, the company was so keen to grow its business that it would extend credit without even the most basic of checks. By claiming not to be a bank, it largely ignored existing money-laundering regulations, and so became a haven for that activity.
Slowly, regulation and reality caught up with its operations, and PayPal started having to work out how to do online what banks had done in branches for a long time – verify its customers, check they were legitimate, match accounts with real people, and the like.
Many staples of the modern internet grew out of these efforts – including CAPTCHA, the hard-to-discern letters and numbers you enter to prove you’re a human. Behind the scenes, PayPal also got good at finding data from public sources and joining it up, to verify identities, appraise credit, and for other purposes.
This expertise formed the basis for what became Palantir. The company doesn’t build cameras, drones or other equipment – it helps governments, militaries and businesses join up and analyse their data.
Put like this, their work sounds a lot like the kind of data dashboards which dozens of much duller companies – everyone from Accenture, to Oracle, to Microsoft – build, but Palantir make theirs sound edgier, giving them names like “Gotham”.
Palantir’s work is largely joining up existing data sources and helping their clients analyse them, which can be innocuous and benign when it’s done to make product recommendations, and which can be life and death when it’s about helping a military make targeting decisions on drone strikes.
One notable feature of this kind of work is that once you’re set up with one company it costs a huge amount of time and effort to switch to another. This was exactly what almost every competent government data professional said when Palantir offered to help out the NHS with data during Covid-19, initially for just £1.
That £1 first dose quickly turned into a £23.5 million contract to run the Covid-19 data store, which in turn led to Palantir being chosen to lead a consortium awarded a £330 million contract to run the NHS’s Federated Data Platform. The path dependency worked exactly like everyone warned it would: Palantir offered a freebie, and were rewarded with hundreds of millions of taxpayers’ money.
Of course, if they break the long-running curse of NHS IT projects and deliver, some would shrug that off as no big deal. But the hype around Palantir has long run far ahead of its reality. Palantir doesn’t make AI models, unlike OpenAI or Anthropic – but it does style itself as an AI company, promising to customise the technology for the benefit of its clients.
That has led to its stock price soaring far beyond anything most companies could imagine. Palantir’s market capital is more than 200 times its projected revenues for 2026 – implying astronomical growth and profitability in the future, well beyond anything it has ever achieved. Palantir’s valuation is so sky high that even The Economist, hardly a bastion of anti-capitalism, said it was “possibly the most overvalued firm of all time” in a piece last year.
The danger of huge valuations is that eventually executives have to justify and defend them, especially if the air starts to go out of what many believe is an AI bubble. Sometimes companies get desperate, which is not a comfortable word for a business that’s being handed some of the UK’s most sensitive health and defence data all at the same time. Ministers assure the public that Palantir doesn’t have access to “patient-identifiable data”, which might be more reassuring if Palantir wasn’t a company that specialised in joining up different data sources to spot patterns and identify people.
Successive governments have chosen to put a huge amount of their trust – and our data – into Palantir’s hands, even as Palantir’s top executives have placed themselves and their company into an increasingly prominent position in the global culture war.
Co-founder Joe Lonsdale this month approvingly quoted a post saying “Commies aren’t allowed in this hemisphere and every one of them should be blown up along with their gravesites” with “Exactly. What did you think founding Palantir was supposed to be about?”.
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All the co-founders echo messages to “protect Western civilisation”, including against “Islamists” that have become increasingly unsubtle dog whistles of the modern far-right. The version of Western values backed by Palantir’s co-founders looks far more like that of Donald Trump than Keir Starmer or European leaders.
CEO Alex Karp, who claims to have once been a liberal, has said Palantir is “completely anti-woke”, has argued “everything you learned at school or college about how the world works is intellectually incorrect” and has claimed the west’s ascendancy in the 21st century wasn’t due to its liberal values, but instead to its “superiority in applying organised violence” – an echo of Trump’s new “might makes right” doctrine.
To say that the UK and Europe have been slow to wake up to new global realities is the understatement of the 21st century. We are on the brink of the US seizing Greenland – an act that could trigger NATO Article 5 – on a whim, and yet we are still entirely dependent on the US for our defence, for the internet, for our economic security, and more.
It might be something if leaders were appeasing Trump in public while preparing in private, but endless delays on new defence strategies, on trade, on procurement and more indicate that in reality Europe is just hoping something comes along to fix the problem for it.
The UK government’s deepening relationship with Palantir represents this dilemma in a nutshell. Palantir is an American company that has gone all-in on Trump, Trumpism and MAGA. It is vulnerable financially and politically. If pressured, it will side with America every time, and it is politically connected and protected there.
Despite all that, the UK government treats it like any other contractor, in any other time, like if we pretend everything is business-as-usual that might somehow make it true. Palantir has always traded off its sinister reputation. It’s always been good for business.
But at some point, some minister must surely start paying at least some attention: if it comes to the crunch, are these guys really on our side?
