October 1, 2020 | International, Land, C4ISR, Security
Frank Bajak, The Associated Press
BOSTON — Seventeen years after it was born with the help of CIA seed money, the data-mining outfit Palantir Technologies is finally going public in the biggest Wall Street tech offering since last year's debut of Slack and Uber.
Never profitable and dogged by ethical objections for assisting in the Trump administration's deportation crackdown, Palantir has forged ahead with a direct listing of its stock, which is set to begin trading Wednesday. In its stock offering, the company isn't selling newly minted shares to raise money; it's simply listing existing shares for public trading.
The low-key strategy may not generate the enthusiasm many technology offerings do. But it's in character for a secretive company long reliant on spies, cops and the military as customers — and whose founders are holding onto voting control of the company.
The big question for both investors and company management: Can Palantir successfully transition from a business built on the costly handholding of government customers to serving corporate customers at scale? The company is a hybrid provider of software and consulting services that often embeds its own engineers with clients.
Analysts say its future depends on selling multinationals on its tools for gathering disparate data from an ever-expanding data universe and using artificial-intelligence technology to find previously undetectable patterns. Those can theoretically guide strategic decisions and identify new markets much as they have aided in tracking terrorists and sorting military intelligence.
The company sets itself apart from most U.S. technology providers, and just moved its headquarters to Denver from Silicon Valley. Palantir colors itself patriotic and belittles other tech firms that won't unquestionably support U.S. dominance in war fighting and intelligence.
“Our software is used to target terrorists and to keep soldiers safe,” CEO Alex Karp wrote in a letter accompanying Palantir's offering prospectus. While Karp acknowledged the ethical challenge of building software that “enables more effective surveillance by the state,” Palantir's prospectus touts its work helping U.S. soldiers counter roadside bombings and fight the Islamic State group.
The iconoclastic entrepreneur and PayPal co-founder endorsed President Donald Trump in 2016, worked on his transition team and holds the largest chunk of Palantir stock. Thiel already exerts tremendous power from the board of Facebook, which dominates global media and seeks to create a digital currency.
In its IPO prospectus, Palantir paints a dark picture of faltering government agencies and institutions in danger of collapse and ripe for rescue by a “central operating system” forged under Thiel's auspices. As the offering is structured, Thiel will be the dominant voice among the Palantir co-founders who will retain voting control.
“Is that someone who you want deciding how a component of the (national) security apparatus is designed?” asked New York University business professor Scott Galloway. “If you believe that power corrupts and checks and balances are a good idea, this is just from the get-go a really bad idea.”
Earlier in September, BuzzFeed reported that Thiel hosted a known white nationalist, Kevin DeAnna, at a 2016 dinner party, citing emails it obtained and published whose authors refused to talk to the online news outlet. Thiel declined through a spokesman to discuss the report with The Associated Press. Critics say he shares the blame for Facebook's incomplete removal of toxic disinformation disseminated by the pro-Trump far-right fringe.
Then there are Palantir's fundamentals, which Galloway considers lousy. The company has just 125 customers in 150 countries, including Airbus, Merck, Credit Suisse and the Danish National Police. Slightly less than half its 2019 revenues were from government agencies, and three clients — which Palantir did not name — accounted for almost a third of revenues.
“They're massively unprofitable and they've never been able to figure it out,” Galloway said, noting that it took Google three years to earn a profit, and Amazon seven. Over a much longer span, Palantir has accumulated $3.8 billion in losses, raised about $3 billion and listed $200 million in outstanding debt as of July 31.
Palantir, named for the mystical all-seeing stones from Tolkien's “Lord of The Rings,” has recently been deepening its relationship with Uncle Sam, including winning a modest contract early in the COVID-19 pandemic for helping the White House gather data on the virus' impact.
Senior emerging technology analyst Brendan Burke of Pitchbook says he isn't worried that Thiel's association with Trump will hurt the company if Trump loses the election.
“The political connections don't appear to be the main driver of their recent substantial contract wins,” he said, although he noted that government contracts can be more volatile than corporate ones, where Palantir's foothold is less firm.
Palantir offers two software platforms. Foundry is designed to link disparate and largely incompatible data sources into a central operating system. It's the company's primary hope for broadening its business.
An earlier product, Gotham, has been used by defense and intelligence analysts and police departments to identify patterns deep within datasets. But the value of “predictive policing” tools developed with the platform have been questioned for their potential to unfairly target people of color. The New Orleans and New York City police departments, once customers, have used it.
A 2017 research paper by University of Texas sociologist Sarah Brayne, who studied the Los Angeles Police Department's use of Gotham, found the software could lead to a proliferation of unregulated personal data collected by police from commercial and law enforcement databases.
On Monday, Amnesty International issued a briefing that says Palantir is failing to conduct human rights due diligence around its contracts with Immigration and Customs Enforcement, calling it “deeply ironic” that the company crows about its determination not to work with regimes like China that abuse human rights.
Palantir's ICE contracts involve the maintenance and improvement of two products used in deportation raids. One of them, its web-based Falcon tool, has enhanced data accessible to investigators “involving the illegal movement of people into, within, and out of the United States,” according to documents obtained by The Associated Press, including court records, and by the nonprofit Electronic Privacy Information Center in a freedom-of-information request.
Palantir has acknowledged in its SEC filing that “unfavorable coverage in the media” and from social activists could hurt its business. It also says its contractual obligations might prevent it from being able to defend its actions publicly, although it recently named a former Wall Street Journal reporter to its board.
Negative publicity over ICE contracts may also have hurt company recruitment on college campuses.
October 25, 2023 | International, Land
U.S. defense contractor General Dynamics' third-quarter results beat Wall Street estimates on Wednesday, as demand for artillery and armored vehicles, driven in part by a need to restock supplies sent to Ukraine, helped offset higher costs.
October 25, 2019 | International, Aerospace
By: Sebastian Sprenger COLOGNE, Germany — A European consortium has pitched the idea of grooming intelligent drone swarms to confuse, disable and destroy enemy air defenses. The proposal is part of the Preparatory Action on Defence Research effort by the European Union to improve collaboration on among member states. Under the heading “Emerging Game Changers,” EU officials asked companies earlier this year to submit ideas for “promising breakthrough technologies” in the field of artificial intelligence for defense applications. The idea behind “SEAD Swarm” is to create the necessary algorithms that would enable a mass of aerial drones to inspect the characteristics of air defense systems, distribute the information within the swarm and derive a plan of attack against weak points. Actions taken could include blinding radar sensors, overwhelming anti-aircraft fire with kamikaze-type tactics, or attacking sites with explosive or electronic-warfare payloads. The acronym SEAD is short for “suppression of enemy air defenses,” military platforms that often expose pilots of manned aircraft to significant risk of getting shot down. The proposed project comes in the wake of Finland designating advances in AI a key objective for its six-month term leading the Council of the European Union. The idea is backed by a consortium of 12 private companies, national research institutions and universities from six countries, with Finnish company Insta as the lead. A decision from European decision-makers on the award of an approximately $2 million grant to start the project is expected in the next few months. Consortium officials stress that nothing would be built during the initial phase of the project. Instead, the idea is to incubate the necessary “swarm logic” and learning algorithms in a simulation environment, where scenarios can be gamed out and quickly adapted, Ari Kosonen, a senior systems engineer at Insta, told Defense News. Letting the drone swarm and air defense systems battle it out in a controlled cyberspace environment would yield patterns of problem-solving that can continuously improve both the attackers' and the defenders' performance, Kosonen said. In addition, thinking through the idea on a purely theoretical level would allow proper consideration for ethical and legal questions that arise whenever AI is weaponized, he added. If adopted by the EU, the participating countries of Finland, Germany, Slovenia, Estonia, the Netherlands and Austria would detail military officials to an advisory board to help ensure the planned simulations reflect real-world combat situations. That includes resisting the urge of crafting scenarios that are too clear-cut in allowing judgments about when to apply force and when to stand down, said Christian Brandlhuber, a senior adviser at consortium member Reply AG in Munich. “Does this work in an environment where our situational awareness is less than perfect?” Therein lies the novelty of the SEAD Swarm idea, Brandlhuber argued: Working through the rules of engagement first, only later considering requirements and finally establish concrete acquisition plans could help bring AI-enabled military technology into the EU-wide defense conversation. “There were heated discussions in the consortium about how pronounced the legal and ethical side should be,” Brandlhuber said. Dicey situations could arise, for example, when drones are cut off from communicating with human decision-makers in the final phase of an attack, while the prerequisite is to have a person in the loop for pulling the trigger. “There is a lot of uncertainty in this,” Brandlhuber said, though he argued analysts should strive to understand the complexity that comes with combining drones and AI in a military context. “You can't determine any of this a-priori.” Notably, the consortium includes sensor and hardware manufacturers, like Diehl Defence of Germany and Milrem of Estonia, that could be tapped to build prototypes if the SEAD Swarm project is selected to go forward. https://www.defensenews.com/global/europe/2019/10/22/europeans-propose-siccing-self-learning-drone-swarms-on-air-defenses/
August 28, 2020 | International, Aerospace
By Garrett Reim Japan's ministry of defence is inviting foreign suppliers to help develop the country's next-generation fighter aircraft, known as the Future Fighter programme, or F-X. The solicitation was made via a public notice and a press briefing by Japanese defence minister Taro Kono on 25 August, according to reports. The Japanese ministry of defence wants components that are at high-technology readiness levels, in areas such as stealth unmanned air vehicles, airborne missile systems, radar, sensors, electronic warfare and communications equipment, according to media outlet Janes. The notice reportedly adds that this next phase will continue discussions related to development of F-X with the USA and UK. “We are inviting companies to [support] the integration of the fighter aircraft,” Kono says. “We are currently exchanging information with the US and UK to deepen our consideration of international co-operation in this development project.” In July, the ministry of defence said it would choose a single Japanese company to serve as prime contractor and lead systems integrator for the jet, according to Janes. That company is thought likely be Mitsubishi Heavy Industries, which builds the Mitsubishi F-15J and runs a final assembly and check-out facility for the F-35 Lightning II in Nagoya, Japan. The Future Fighter is to replace Tokyo's Mitsubishi F-2 fleet in the 2030s. The F-2 is a fighter derived from Lockheed Martin's F-16. Mass production of the F-X is reportedly planned to start in 2031. The next-generation aircraft would be deployed in 2035. https://www.flightglobal.com/fixed-wing/japan-requests-foreign-help-with-f-x-as-programme-moves-into-next-phase-reports/139927.article?referrer=RSS