History of Palantir: Controversial Startup to Data-Mining Giant (2003 – Now)

Palantir Technologies has evolved into a major player in data analytics, empowering organizations to effectively integrate their data, decisions, and operations at scale.

For business owners, marketers and anyone intending to learn from successful business stories, the history of Palantir provides insights into innovation and strategic growth.

At Business2Community, we’ve consulted a range of sources to provide a comprehensive overview of Palantir and its journey to becoming a leading player in the data analytics landscape.

Read on to discover the company’s key milestones, controversies, and more.

Palantir Net Worth and Business Breakdown

• Date Founded: May 2003
• Founded By:  Peter Thiel, Nathan Gettings, Joe Lonsdale, Stephen Cohen, and Alex Karp
• Industries: Software
• Palantir Net Worth: $60.53 billion
• Stock Ticker: NYSE: PLTR

Who Owns Palantir?

As a public company, Palantir is owned by various shareholders.

As of 2024, Vanguard Fiduciary Trust Co. was the largest shareholder, with a 9.24% stake. This was followed by co-founder and Silicon Valley billionaire Peter Thiel, with a 5.35% ownership stake.

Palantir Technologies was founded in 2003 by Peter Thiel and co-founders Nathan Gettings, Joe Lonsdale, Stephen Cohen, and Alex Karp. The mission-oriented company, whose name was inspired by a powerful seeing stone in Lord of the Rings, was formed to reduce terrorism while preserving civil liberties.

In addition to $30 million in seed funding from Thiel’s venture capital firm, Founders Fund, the start-up received $2 million from In-Q-Tel, the venture capital arm of the CIA.

Additionally, between 2006 and 2020, the company raised over $3.3 billion from hundreds of investors over several rounds. In 2020, the company went public through a direct listing which valued the company at $20.6 billion. As of July 2024, Palantir had a market cap of $60.53 billion, placing it among the top ten AI companies in the world.

Who is the Palantir CEO?

The CEO of Palantir is Alex Karp, who has held the position since 2004. As part of the founding team, Karp has played a crucial role in the company’s strategic vision and growth.

Throughout his tenure, Karp has maintained a vocal stance on controversial social and political issues. In March 2024, CNBC reported that Palantir had lost employees due to the CEO’s outspoken pro-Israel views.

Growth and Development of Palantir

Headquartered in Denver, Colorado, Palantir is a software company specializing in big data analytics. Palantir has developed four principal software platforms, namely:

• Palantir Gotham: Surfaces insights for global defense agencies, the intelligence community, disaster relief organizations, and beyond.
• Palantir Foundry: Allows institutions to transform massive amounts of information into an integrated data asset that reflects their operations.
• Palantir Apollo: A cloud-agnostic, single control layer that coordinates the ongoing delivery of new features, security updates, and platform configurations, ensuring the continuous operation of critical systems in virtually any environment.
• Palantir AIP: A comprehensive AI solution to power decision-making in the most critical commercial and government contexts around the world.

As of 2024, Palantir works with the world’s leading government and commercial institutions. Below we track its 20-year journey to prominence.

2003-2008: Palantir Is Born

Palantir developed its initial technology technology from a PayPal fraud detection program called Igor. Peter Thiel, co-founder of both PayPal and Palantir, proposed adapting Igor’s capabilities to track terrorist networks through their financial transactions.

During the early days, Palantir Technologies struggled to land new customers. Between 2005 and 2008, Palantir worked solely with the CIA, alpha-testing and evaluating its software.

However, as an early investor and the company’s first customer, the CIA gave Palantir much-needed credibility. Soon, other US government agencies enlisted the expertise of the data company and by the end of 2008, Palantir was worth $400 million.

2009-2012: Palantir’s Early Expansion

Five years after its founding, the company had grown to over 150 employees, with Palantir’s software being used by intelligence analysts to integrate and analyze large sets of data, including intelligence reports and information collected through surveillance and reconnaissance activities.

In 2010, the company landed its first private client, JPMorgan Chase, by recommendation of the New York Police Department. The bank was one of the first financial institutions to adopt Palantir’s software. That year, with the US government intelligence and defense agencies making up 70% of the company’s business, Palantir’s valuation increased to $730 million.

In early 2011, a Palantir employee was involved in the controversial HBGary Federal proposal, which outlined plans for cyberattacks and smear campaigns against WikiLeaks and its supporters, including journalist Glenn Greenwald. While the employee was not fired, Palantir CEO Alex Karp issued a personal apology to Greenwald.

Additionally, Palantir settled a lawsuit filed by rival i2 Group based on accusations that a Palantir employee Shyam Sankar obtained i2 software and used it to design competing products. The value of the settlement was undisclosed.

Despite these challenges, Palantir was a primary provider of intelligence software by the end of 2011, aiding over 35 units across the military. The company’s revenues were just under $300 million and its value had also tripled to more than $2.5 billion.

2013-2016: Palantir Takes Off

As of 2013, up to 50% of Palantir’s business was with the public sector.

The company’s client list list included:

• The CIA
• The FBI
• The NSA
• The Center for Disease Control
• The Marine Corps
• The Air Force
• Special Operations Command
• West Point
• The IRS

That same year, the company made its first acquisition, adding the Voicegem team to its mission of analyzing the world’s information. By the end of 2013, Palantir’s revenue hit $450 million, and the company was valued at around $9 billion.

In 2014, Palantir made several other acquisitions, including Poptip a social media data startup, and Propeller, a native mobile app builder. Named one of the world’s most valuable startups, Palantir made over $1 billion in revenue in 2014 and its valuation surpassed $15 billion.

To expand into retail and add shopping data to its analytics platform, Palantir kicked off 2015 by acquiring FT Technologies. By the year’s end, Palantir’s revenue exceeded $1.7 billion and the company was valued at around $20 billion.

2016 saw Palantir enter into key partnerships with Credit Suisse and Airbus. In particular, using Foundry, Palantir’s commercial application, Palantir engineers merged Airbus’ data silos related to the production of the A350, integrating more than 400 sets of data.

Palantir was so effective that it helped cut the time to fix production mistakes down from 24 days to 17 and helped Airbus save several hundred million dollars.

Palantir also initiated legal action against the US Army, alleging unfair exclusion from the bidding process for the next stage of the Distributed Common Ground System-Army (DCGS-A). While the court dismissed Palantir’s claims of “bad faith” on the Army’s part, it ultimately ruled in favor of the company in November 2016, determining that the Army had wrongly prevented the company from competing for the contract.

This legal victory coincided with Donald Trump winning the presidential election, notably after Palantir co-founder Peter Thiel had donated over $1 million in campaign and super-PAC contributions. As a result, Palantir gained valuable political connections. Notably, one of Thiel’s closest associates, JD Vance, was named Trump’s VP pick for the 2024 election so Palantir seems to be continuously gaining more political power.

2017-2019: Palantir Diversifies its Business Model

By 2017, Palantir’s strategy of focusing solely on clients that could deliver $100 million or more in sales paid off, resulting in tenfold growth. The company had secured 20 contracts worth more than $100 million, including one with the US Navy Seals worth around $400 million, up from just two in 2014.

To help transform global humanitarian aid delivery, Palantir also partnered with the World Food Program. That year, Palantir reported revenues of over $600 million, with revenue generated outside the US doubling in 2016 and 2017.

Demonstrating the continued diversification of its business model, corporate clients accounted for 50% of Palantir’s revenue in 2018. The company also secured lucrative partnerships with diverse companies like UniCredit, Grupo Globo, and Ringier.

Against this backdrop, Palantir came under scrutiny for its involvement in several controversies. The company was implicated in the Cambridge Analytica scandal. Christopher Wylie, a former Cambridge Analytica employee-turned-whistle-blower, claimed that Palantir helped the firm harvest Facebook data that was then used on behalf of the Trump campaign.

After an investigation, Palantir found that the matter involved a London-based employee, who was consequently fired.

Another incident involved a rogue JPMorgan Chase employee who used Palantir Metropolis to spy on colleagues and senior executives. Following Palantir’s involvement in monitoring confidential company communications, JPMorgan cut back its Palantir operations.

2019 proved to be a successful year for the data company. Palantir won a ten-year contract for DCGS–A worth $876 million and was awarded $25 million to track national COVID-19 data.

The Department of Veterans Affairs spent $5 million on Palantir’s software to analyze COVID-19 outbreak areas and provide data on supply-chain capacity, hospital inventory, and lab diagnostics.

The company also renewed its controversial multi-year contract with Immigration and Customs Enforcement (ICE). This drew significant scrutiny and raised concerns about the company’s ethical practices. Critics argued that Palantir had failed to conduct thorough human rights due diligence in its dealings with ICE, potentially contributing to human rights violations against asylum-seekers and migrants through its technology.

Examples cited included ICE’s 2017 use of Palantir technology to arrest parents and caregivers of unaccompanied children, resulting in detentions and harming the children’s welfare. Critics also pointed to ICE’s use of Palantir technology to plan mass raids, such as those conducted in Mississippi in August 2019, which led to family separations, prolonged detention, deportations, and irreparable harm to families and communities.

That November, the company created a jointly controlled entity with SOMPO Holdings, Inc. to provide Palantir’s data platforms and services in Japan. As part of this partnership, SOMPO created the Real Data Platform (RDP), powered by Palantir Foundry to drive impact across key areas such as elderly care, IoT, and health infrastructure.

Overall, Palantir generated $742.6 million in revenue in 2019, an increase of 25% from $595.4 million in 2018. With a valuation of $20 billion, Palantir ranked among Silicon Valley’s top-five unicorns, alongside Uber, Airbnb, SpaceX, and WeWork. Despite the company’s consistent revenue growth, its losses, amounting to $600 million for the second consecutive year, raised concern.

2020-2022: Palantir Goes Public

In March 2020, Palantir began working with the UK’s NHS to improve data collection related to the pandemic. The million-pound deal sparked outrage from progressive groups and a lawsuit from Open Democracy (later retracted). “No Palantir in our NHS” campaigns were also launched by 50 healthcare, anti-racist, human rights groups.

That July, Palantir announced its plans to go public and revealed via its prospectus in August that roughly a third of its revenue came from its three biggest customers and that it was yet to turn a profit. The company also reported that it had generated revenue of $481 million in the first half of 2020, up nearly 50% from the previous year, and losses of $164 million, down from $280 million during the same period in 2019.

Estimating a total addressable market of around $119 billion, Palantir doubled down on its plans to attract more corporate clients in 2020. It also continued its shift to a more standardized model. Palantir reported that the time required for its software to get up and running had decreased by more than 5x since Q2 2019 to an average of 14 days in Q2 2020.

Following the direct listing approach of tech companies like Slack and Daniel Ek‘s Spotify, Palantir chose to forgo underwriters, bypassing the traditional process of assessing demand and setting a price. On September 30, Palantir’s stock soared 50% above its reference price within the first 30 minutes of trading and closed at $9.50, 31% above the initial reference point.

Palantir’s standardization and resource optimization efforts reflected positively on the company’s performance. As of December 31, 2020, the company’s platforms were used by 139 customers, including some of the largest and most significant institutions in the world. Total revenue also crossed the billion mark at $1.1 billion, a 47% increase from 2019.

In January 2021, Palantir demonstrated its proprietary software at an inaugural Demo Day. Investors saw how Foundry and Gotham worked along with their applications for government agencies, manufacturers, and commercial customers. They also got to see how Palantir’s newly debuted continuous delivery software, Apollo, worked to power Foundry and Gotham in any environment, even in places where other SaaS systems could never operate.

Palantir entered other lucrative partnerships early in the year, including:

• A channel sales relationship with IBM to supply a new product leveraging certain components of Foundry integrated with IBM’s Cloud Pak for Data.
• A multi-million dollar deal to drive 3M’s digital transformation and supply chain optimization using Foundry.

As of the first quarter, Palantir had 149 customers, with most being large organizations. To expand its customer base beyond large enterprise and public sector clients, Palantir launched Palantir Foundry for Builders in July 2021. The initiative, designed for smaller companies included startups such as Chapter, Hence AI, Adyton, and Gecko Robotics.

By the end of the year, the company had increased its customer base to 237, spanning over 50 industries globally. Of the $1.5 billion in revenue generated in 2021, 58% originated from government clients, while 42% came from the commercial sector. Additionally, 57% of its revenue was derived from US customers while 43% was from international clients.

As Palantir entered its 19th year of not achieving profitability, the company shifted its focus towards strategic expansion in its government and commercial operations. In addition to landing multi-million dollar contract extensions with government agencies such as the UK Royal Navy and Fortune 100 companies, Palantir scaled its staff by 26%.

These efforts paid off and by the end of 2022, Palantir’s global customer base had expanded to 367 companies.

While 61% of its $1.9 billion revenue originated from US customers, the remaining 39% came from international clients. Additionally, government contracts accounted for 56% of revenue while its commercial business accounted for 44%.

Although profitability eluded the company for yet another year, Palantir made strides in reducing its losses to $371 million in 2022, a significant improvement from $520 million in 2021 and $1.1 billion in 2020.

2023-Present: Palantir Becomes Profitable

In early 2023, the German Federal Constitutional Court banned the use of Palantir’s crime data platform due to its use of surveillance data to inform predictive policing.

Meanwhile, amid mounting concerns about trust and national security, Palantir won a seven-year NHS contract worth $415 million. The company also entered into a strategic partnership with the Ministry of Defense of Lithuania to develop a technical center in Vilnius.

In the US, Palantir was awarded a $250 million firm-fixed-price contract with the US Department of Defense (DoD) to conduct research and development services in the area of artificial intelligence and machine learning.

Other notable partnerships throughout 2023 included Cleveland Clinic, Panasonic, PwC, Babcock, and AirMatrix.

Following the launch of its artificial intelligence platform (AIP), Palantir was ranked the number one vendor in AI, data science, and machine learning in October 2023.

Turning an operating profit for the first time since its founding that year, Palantir proved that its business model of big data integration in government agencies and large enterprises was effective.

In 2024, Palantir took a novel approach to marketing and selling its AI offering. The company conducted more than 1,300 boot camps with organizations across industries and sectors, providing potential partners the opportunity to test and build on its platforms.

As a result, Palantir generated $634 million in revenue in the first quarter of the year, a 21% increase over the previous year. The company also made a profit of $106 million, the largest in the company’s 20-year history.

Latest Update: Palantir’s Inclusion in the S&P 500

Palantir’s recent inclusion in the S&P 500 Index as of September 2024 represents a significant milestone in the company’s history. The inclusion was driven by Palantir’s consistent profitability and the success of its artificial intelligence platform (AIP). This achievement is seen as a validation of the company’s long-term strategy and profitability potential.

After several quarters of strong performance and profitability, the company had been a contender for this prestigious index. Joining the S&P 500 has boosted Palantir’s stock value, with shares seeing an 8% increase following the announcement. This inclusion also signifies increased confidence from institutional investors and further solidifies Palantir’s place among America’s most influential companies.

Palantir’s inclusion is expected to drive more momentum, particularly in the commercial sector, as its AI solutions and government partnerships continue to expand.

Analysts have highlighted the company’s AI-driven platforms as a key growth driver, making Palantir well-positioned for further advancements in the global enterprise space

New Strategic Partnerships and AI Expansion

In conjunction with its inclusion in the S&P 500, Palantir has recently strengthened its partnerships, particularly with BP.

The two companies extended their relationship, focusing on the integration of Palantir’s AI platform (AIP) to optimize energy operations and harness real-time data analytics. These moves further expand Palantir’s footprint in the energy sector and underscore its increasing relevance in AI applications across industries

Palantir Dividend History

During its 2020 IPO, Palantir shares, listed on the NYSE under the ticker symbol PLTR, closed at $9.50. By the next year, shares were up 2.5x to around $25.

Between April 2023 and April 2024, Palantir’s stock price nearly tripled, with shares trading at around $27.95 by July 17, 2024.

Palantir has never declared or paid cash dividends on its capital stock. In its 2023 annual report, the company states that it intends to retain any future earnings to finance the operation and expansion of its operations. The company also reiterated that it didn’t anticipate declaring or paying any dividends in the foreseeable future.

Stock Performance in 2024

Palantir’s stock has surged nearly 77% year-to-date, reflecting not just its S&P 500 inclusion, but also its ongoing momentum in securing key AI contracts and partnerships. Analysts expect continued growth, driven by its expanding AI capabilities and new enterprise agreement

History of the Palantir Logo

Since its inception, Palantir’s logo has been a black circular orb sitting above two leaf-like supports, paired with the word Palantir in a bold, black sans-serif font. The logo, designed by Gary Tan and others at Palantir, went through five iterations and was chosen for its simplicity and powerful symbolism.

In addition to its nod to powerful, all-seeing Palantir objects from the Lord of the Rings, the logo (which looks like the aerial view of a human poring over a book), is also a symbol of human intelligence. Together, these two ideas convey Palantir’s aspirations of combining machine and human intelligence for the good of society.

The Future of Palantir

Palantir highlights the power of creating an innovative, niche product offering and driving demand for that product across multiple industries.

For example, instead of lobbying the US government from the outside to land lucrative defense contracts, Palantir introduced its product from inside the military, creating both internal demand and a network of pre-trained users. As it established credibility, more opportunities opened up within the intelligence community, driving the startup’s growth.

While having a niche product can be an advantage, Palantir’s evolving business model, and the profitability it has secured for the company, highlights the power of targeting more customer segments.

Palantir believes in augmenting human intelligence and its intention in 2024 and beyond is to make its artificial intelligence platform (AIP) the most dominant infrastructure in the market and power the effective deployment of AI across institutions.

However, advocacy groups have repeatedly challenged the company’s contracts, emphasizing the need for greater transparency and accountability in public sector procurements involving sensitive data.

While the company is well-positioned to usher in a new era of AI capabilities for global enterprises, Palantir will need to ensure that it earns public trust by living up to its mission of advancing and protecting humanity.

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