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October 1, 2020 | International, Land, C4ISR, Security

Secretive, never profitable Palantir makes its market debut

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.

https://www.defensenews.com/industry/2020/09/30/secretive-never-profitable-palantir-makes-its-market-debut/

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  • Défense: la France veut son «planeur hypersonique»

    January 28, 2019 | International, Aerospace

    Défense: la France veut son «planeur hypersonique»

    Jean-Dominique Merchet La ministre des Armées a annoncé le lancement d'un « démonstrateur », qui s'inscrit dans la relance de la course aux armements. Florence Parly a annoncé le 21 janvier avoir notifié un contrat à ArianeGroup pour le lancement d'un démonstrateur de « planeur hypersonique » qui devrait effectuer son premier vol d'ici à la fin 2021. Ces systèmes, dont s'équipent les grandes puissances nucléaires, permettent d'échapper aux défenses antimissiles et de réaliser des frappes très précises. Beaucoup d'experts estiment qu'ils ont un rôle « déstabilisateur » des équilibres stratégiques. Une simple phrase glissée au milieu d'un long discours de vœux. C'est ainsi que la ministre des Armées Florence Parly a annoncé le lancement d'un « planeur hypersonique », un projet d'importance stratégique. Ce « démonstrateur », qui devrait voler d'ici « à la fin 2021 », s'inscrit dans la relance actuelle de la course aux armements stratégiques entre les grandes puissances. Cette annonce a provoqué la surprise dans les milieux spécialisés et le ministère des Armées est réticent à fournir publiquement beaucoup plus de détails. Toutefois, plusieurs experts et proches du dossier, tenus à l'anonymat, se sont confiés à l'Opinion et permettent de mesurer l'importance de ce projet. Article complet: https://www.lopinion.fr/edition/international/defense-france-veut-planeur-hypersonique-175912

  • Drone maker General Atomics lays off hundreds

    August 28, 2020 | International, Aerospace

    Drone maker General Atomics lays off hundreds

    By: Joe Gould and Valerie Insinna WASHINGTON ― Privately held drone maker General Atomics, of San Diego, is laying off approximately 630 of its roughly 10,000 employees. “General Atomics Aeronautical Systems, Inc. can confirm a reduction in force involving 6% of its workforce,” a spokesperson wrote in an email to Defense News late Wednesday. “This reduction was made to balance resources with customer requirements.” The layoffs were announced internally Wednesday and confirmed by the company, which did not specify which operations were impacted. General Atomics and Northrop Grumman were two beneficiaries of the Trump administration's recent decision to ease restrictions on overseas sales of unmanned aircraft. In addition, lawmakers are expected to boost Reaper buys in the near term, with House appropriators proposing to give General Atomics $344 million for 16 more MQ-9s in fiscal 2021. But the company was also dealt a blow earlier this year when the Air Force announced it would stop buying the MQ-9 Reaper in fiscal year 2021, at least four years earlier than expected. And now the future of the program remains uncertain, with the Air Force looking at options to replace the MQ-9 Reaper. Over the past two decades, the Reaper has served as one of the Air Force's workhorse drones for surveillance and for striking targets in the Middle East. But service leaders believe it is ill-suited for a war with Russia and China. In addition, they believe it costs too much time and money to keep the aircraft ready for operations in low-threat environments. “The Reaper has been a great platform for us. Four million flight hours, just undeniable overmatch in a low-end uncontested fight, and it is certainly saving lives,” Air Force acquisition executive Will Roper told lawmakers at a House Armed Services Committee hearing this March. “But as we look to the high-end fight, we just can't take them into the battlefield. They are easily shot down.” In June, the Air Force issued a request for information for an MQ-9 successor, underscoring the service's plan to transition from the Reaper to a new surveillance and strike drone. https://www.defensenews.com/2020/08/27/drone-maker-general-atomics-lays-offs-hundreds/

  • Contract Awards by US Department of Defense - February 14, 2020

    February 15, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Contract Awards by US Department of Defense - February 14, 2020

    ARMY Oshkosh Defense LLC, Oshkosh, Wisconsin, was awarded a $407,335,834 modification (P00291) to contract W56HZV-15-C-0095 to procure Joint Light Tactical Vehicles and associated kits. Work will be performed in Oshkosh, Wisconsin, with an estimated completion date of Jan. 31, 2022. Fiscal 2018 and 2020 other procurement, Army; procurement, U. S. Marine Corps; and Foreign Military Sales (Lithuania and Slovenia) funds in the amount of $407,335,834 were obligated at the time of the award. U.S. Army Contracting Command, Detroit Arsenal, Michigan, is the contracting activity. Maloney Odin JV,* Novato, California, was awarded a $48,064,247 firm-fixed-price contract to degrade and reconstruct two miles of levee to support Sacramento River East Levee construction of both deep mix method and slurry trench cutoff walls. Bids were solicited via the internet with two received. Work will be performed in Sacramento, California, with an estimated completion date of Dec. 15, 2020. Fiscal 2020 civil construction funds in the amount of $48,064,247 were obligated at the time of the award. U.S. Army Corps of Engineers, Sacramento, California, is the contracting activity (W91238-20-C-0004). General Dynamics Mission Systems Inc., Taunton, Massachusetts, was awarded a $26,869,595 cost-plus-fixed-fee contract to procure Year 11 system engineering and program management services for product manager tactical network, systems, and equipment. Bids were solicited via the internet with one received. Work will be performed in Taunton, Massachusetts, with an estimated completion date of Jan. 22, 2021. Fiscal 2020 other procurement, Army, funds in the amount of $26,869,595 were obligated at the time of the award. U.S. Army Contracting Command, Aberdeen Proving Ground, Maryland, is the contracting activity (W15P7T-20-F-0005). Cray Inc., Seattle, Washington, was awarded a $25,480,000 firm-fixed-price contract for Department Of Defense high-performance computing modernization programs. Bids were solicited via the internet with three received. Work will be performed at Wright-Patterson Air Force Base, Ohio, with an estimated completion date of Aug. 13, 2025. Fiscal 2020 other procurement, Army, funds in the amount of $25,480,000 were obligated at the time of the award. U.S. Army Corps of Engineers, Huntsville, Alabama, is the contracting activity (W912DY-20-F-0147). Cybernet Systems Corp.,* Ann Arbor, Michigan, was awarded a $22,367,890 firm-fixed-price contract for ongoing development, manufacture, delivery, set-up and integration of up to 25 new and existing automated tactical ammunition classification systems and spent brass sorter units. Bids were solicited via the internet with one received. Work locations and funding will be determined with each order, with an estimated completion date of Feb. 13, 2025. U.S. Army Contracting Command, Rock Island Arsenal, Illinois, is the contracting activity (W52P1J-20-D-0012). DEFENSE INFORMATION SYSTEMS AGENCY Hewlett Packard Enterprise Co., San Jose, California (HC1084-20-D-0003), was awarded a competitive, single award, indefinite delivery/indefinite quantity, firm-fixed-price contract with a ceiling of $61,825,294 for integrated processor capacity services – X-86 (IPCS-X) for Defense Information Systems Agency (DISA), Operations Center. The place of performance will be at DISA data centers or future DISA or DISA-approved locations where DISA assumes an operational responsibility for support of Missions Partner service requirements. The solicitation, HC1082-18-R-0022, was posted on Federal Business Opportunities website (www.fbo.gov), now known as beta.SAM.gov website (www.beta.sam.gov). The solicitation was issued as a competitive action and four proposals were received. The period of performance (PoP) consists of a five-year base period and five one-year option periods for a total contract life cycle of ten years. The base period of performance is Feb. 14, 2020, through Feb. 13, 2025, and the option years follow consecutively through Feb. 13, 2030. The Defense Information Technology Contracting Organization, Scott Air Force Base, Illinois, is the contracting activity (HC1084-20-D-0003). NAVY BAE Systems Jacksonville Ship Repair LLC, Jacksonville, Florida, is awarded a $24,569,851 cost-plus-award-fee contract for the accomplishment of post-shakedown-availability (PSA) for one Freedom-variant Littoral Combat Ship (LCS), with options for the accomplishment of PSAs for up to seven additional Freedom-variant LCSs. This contract includes options, which, if exercised, would bring the cumulative value of this contract to $203,886,801. The PSA is accomplished within a period of approximately 16 weeks between the time of ship custody transfer to the Navy and the shipbuilding and conversion (Navy) obligation work limiting date. The PSA encompasses all of the manpower, support services, material, non-standard equipment and associated technical data and documentation required to prepare for and accomplish the PSA. The work to be performed will include correction of government-responsible trial card deficiencies, new work identified between custody transfer and the time of PSA, and incorporation of approved engineering changes that were not incorporated during the construction period which are not otherwise the building yard's responsibility under the ship construction contract. Work will be performed in Mayport, Florida, and is expected to be completed by March 2021. If all options are exercised, work will continue through November 2025. Fiscal 2020 shipbuilding and conversion (Navy) funding for $7,000,000 will be obligated at time of award and will not expire at the end of the current fiscal year. This contract was competitively procured via the Federal Business Opportunities website, with one offer received. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity (N00024-20-C-2320). The Syncon LLC,* Chesapeake, Virginia, is awarded a $23,242,171 firm-fixed-price contract for the construction of Commander Undersea Surveillance intelligence, surveillance and reconnaissance operations expansion located at Naval Air Station Oceana. This contract also included three planned modifications. The work to be performed provides for the construction of a new addition attached to the current facility. The new addition will be constructed of a structural steel frame, concrete slab, and a modified bitumen roof system. The existing building will be reconfigured to compliment the expanded spaces to meet mission requirements. Site improvements include but are not limited to demolition of the existing warehouse. The site will be reconfigured to accommodate 330 parking spaces, a new access road, a new loading dock, landscaping, flagpoles, site furnishings, dumpster relocation, exterior signage, free mitigation and storm water management. Work will be performed at Virginia Beach, Virginia, and is expected to be completed by March 2022. Fiscal 2018 military construction, Navy contract funds for $23,242,171 are obligated on this award and will not expire at the end of the current fiscal year. This contract was competitively procured via the Navy Electronic Commerce Online website with four proposals received. The Naval Facilities Engineering Command, Mid-Atlantic, Norfolk, Virginia, is the contracting activity (N40085-20-C-8503). Jacobs Ewingcole JV, Pasadena, California, is awarded a task order N62473-20-F-4323 at $15,865,000 under an indefinite-delivery/indefinite-quantity contract for design-build construction packages at Naval Air Weapons Station (NAWS), China Lake. The work to be performed provides design and engineering services for design-build request for proposals for various fiscal 2021 military construction (MILCON) projects impacted by last year's earthquakes onboard NAWS China Lake. Work will be performed in Ridgecrest, California, and is expected to be completed by November 2020. Fiscal 2020 MILCON, (Navy) contract funds for $7,932,500 are obligated on this award and will not expire at the end of the current fiscal year. The Naval Facilities Engineering Command, Southwest, San Diego, California, is the contracting activity (N62473-18-D-5801). Lockheed Martin Space, Titusville, Florida, is awarded a $13,860,565 cost-plus-fixed-fee modification (P00004) to exercise options under a previously awarded and announced contract (N00030-19-C-0100) for Trident II (D5) missile production and deployed systems support. Work will be performed in Cape Canaveral, Florida (62.3%); Sunnyvale, California (35.9%); and other various locations (less than 1% each; 1.8% total). Work is expected to be completed Sept. 30, 2024. Fiscal 2020 weapons procurement (Navy) funds for $13,860,565 are being obligated on this award, none of which will expire at the end of the current fiscal year. This contract was awarded to the contractor on a sole-source basis under 10 U.S. Code 2304(c)(1) and was previously synopsized on the Federal Business Opportunities website. Strategic Systems Programs, Washington, District of Columbia, is the contracting activity. PrimeTech International Inc.,* North Kansas City, Missouri, is awarded a $12,746,631 firm-fixed-price, time-and-materials six-month bridge contract for logistics services to manage, support and operate the Marine Corps Consolidated Storage Program warehouse network. Work will be performed in Barstow, California (23%); Camp Lejeune, North Carolina (18%); Camp Pendleton, California (13%); Okinawa, Japan (10%); Miramar, California (9%); Camp Geiger, North Carolina (7%); Twenty-nine Palms, California (4%); Cherry Point, North Carolina (4%); Kaneohe Bay, Hawaii (3%); Yuma, Arizona (2%); Beaufort, South Carolina (2%); Iwakuni, Japan (2%); New River, North Carolina (2%); and Bridgeport, California (1%). Work is expected to be completed September 2020. Fiscal 2020 overseas contingency operations funds for $12,583,974; and operations and maintenance funds (Marine Corps) for $161,658 will be obligated at the time of award and will expire at the end of the current fiscal year. This contract was not competitively procured in accordance with 10 U.S. Code 2304 (c)(1); only one responsible source and no other supplies or services will satisfy agency requirements. The Marine Corps Logistics Command, Albany, Georgia, is the contracting activity (M67004-20-P-2001). EPS Corp., Tinton Falls, New Jersey, is awarded an $8,531,520 modification to exercise an option to a previously awarded hybrid cost-plus-fixed-fee and firm-fixed price, indefinite-delivery/indefinite-quantity contract (N00174-17-D-0026) for technical expertise in the development and testing of underwater weapons and underwater weapons systems components. This requirement is to develop an underwater weapons system acquisition/procurement program that provides underwater weapons systems (including authentic foreign mines) for research, development test and evaluation of underwater weapons systems and mine countermeasures systems. Work will be performed in Tinton Falls, New Jersey (95%); Montenegro (2%); Bulgaria (2%); and Italy (1%), and is expected to be completed by February 2021. No funding is being obligated at time of award. The Naval Surface Warfare Center, Indian Head Explosive Ordnance Disposal Technology Division, Indian Head, Maryland, is the contracting activity. DEFENSE LOGISTICS AGENCY Sysco Seattle, Inc., Kent, Washington, has been awarded a maximum $7,150,000 fixed-price with economic-price-adjustment, indefinite-quantity contract for full-line food distribution for Department of Defense support of Navy customers in the Seattle, Washington/Puget Sound Region. This was a sole-source acquisition using justification 10 U.S.C. 2304 (c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is a 63-day bridge contract with no option periods. Location of performance is Washington, with an April 18, 2020, performance completion date. Using military service is the Navy.Type of appropriation is fiscal 2020 defense working capital funds. The contracting agency is Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE300-20-D-3263). *Small business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2085466/source/GovDelivery/

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