The all-seeing eye of the military: How Palantir became an AI supplier to corporations and the Pentagon

Palantir's capitalization exceeded $400 billion after the publication of a successful quarterly report. The American company specializing in intelligence gathering and processing showed a 48% growth in revenue in the second quarter (ended June 30) to more than $1 billion. In a statement to shareholders, founder Alexander Karp said that the company plans to become "the dominant software developer of the future". For Onivest, journalist Roman Mighty looked into why Palantir is attracting investor attention and why human rights and civil rights activists don't like a future that could be dominated by such a company.

Palantir has built an empire on U.S. government contracts, serving the CIA and other intelligence agencies, the military, and the Department of Homeland Security - clients that Silicon Valley's big honor shunned all through the two-thousandths. 

While bigtech employees protested against the execution of Defense Department and police orders, Palantir sued the U.S. Army for the right to become its supplier - arguing that existing procedures prevented companies from the Valley from bidding.

The company proved that the laws require government agencies to use private-sector innovation and purchase commercial products rather than trying to develop them themselves. A court win in 2019 opened the door for Palantir to compete with traditional Defense Department contractors. After winning a bid from military giant Raytheon, Palantirwon its first major 10-year contract for $876 million. Six years later, the amounts have grown by leaps and bounds - in the first seven months of 2025 alone, the U.S. militaryagreed to award it a $10.8 billion order. 

On an Aug. 4 investor call, Palantir co-founder Alexander Karpsaid that the company and its technology should provide the U.S. government with a "non-sporting advantage" over others. "We continue to believe that America is the leader of the free world, in the superiority of the West, and that we should fight for our values," he said.

In its quarterly report, Palantir reported a surge in sales to private clients, not the government. Revenue from them in the U.S. increased 93% year-over-year to $306 million - that's 71.8% of government contracting revenue in the same market. 

The prevalence of government contracts in the portfolio worries investors, just a month and a half ago wrote MarketWatch. 

Now Chief Revenue Officer Ryan Taylor says the company is "changing the way we think about enterprise artificial intelligence capabilities." 

Generative artificial networks are divorced from a real understanding of problems, and at one moment they may appear to be superior to humans in solving a problem, but the next moment they make catastrophic mistakes that humans would never make, Taylor admits. But it is claimed that Palantir's Ontology enterprise product is devoid of this flaw.

Ontology collects a company's data together and creates its digital twin, where data is linked to real-world objects and business processes. The total value of business contracts, Taylor says, reached $2.3 billion in the quarter. With Palantir, compliance screening time for new Citibank customers dropped from nine days to a few seconds, he claims, Fanny Mae began rapidly conducting mortgage fraud investigations that used to take two months, Nebraska Medicine reported that the implementation of Palantir's technology has reduced the time it takes to discharge clients to the

To fully customize the system, Palantir sends seconded engineers to clients, embedded into the company's workflows. In 2009, reported Bloomberg, JPMorgan sent 120 such employees at once. With their help, the internal fraud unit collected correspondence, device coordinates, phone records, data on printed documents of bank employees, and tracked their working hours. Even security officials were shocked that neither the bank, nor Palantir, had set limits on where the surveillance would end, the publication said.  

Investors questioned the effectiveness of the secondment model. Karp argues that it has been successful: "our clients tell other clients: 'If you want this to work, bring in Palantir, and listen to how they organize their culture within your culture with their products.' "Everyone despised this model until the last quarter," he says, and now "it's become a competitive advantage, delivering exceptional financial results."

In the universe of the writer John Tolkien, palantirs were stones created by elves through which the owners could communicate with each other or see what was happening in other parts of the world. One of the stones belonged to Sauron, who managed through it to drive another palantir holder mad and seduce the second one into the path of evil by instilling in them a false understanding of what they saw.

Palantir's data, according to its founders, helps make the world a safer place. But human rights activists are concerned about its growing role in systems of state control.

According to Berlin-based organization Society for Civil Rights, the collection of unlimited amounts of data for law enforcement agencies violates people's fundamental right to informational self-determination and telecommunications privacy. "Anyone who files a complaint, becomes a victim of a crime or just happens to be in the wrong place at the wrong time can attract the attention of the police with this software," says the organization's lawyer Franziska Görlitz. At the same time, law enforcement agencies do not warn people that they have been targeted,

The New York Times stated that some critics are calling the company the creator of a "digital kill chain." Collecting people's data in one place creates the risk of people who shouldn't have the information having access to it. And it could serve a repressive purpose, warns Victoria Noble of the Electronic Frontier Foundation.

Sydney University of Technology professor Noel Castree, criticizing Palantir, recalls U.S. President Dwight Eisenhower. The latter believed that the unification of the military and industrial complexes created an opportunity for abuse of power and influence, and this could become a threat  to American democracy.

Karp claims to be defending American values. "I'm not going to apologize for defending the U.S. government at the border, defending Special Forces, bringing people home. I'm not apologizing for giving our products to Ukraine or Israel or many other countries," he tells critics. And to shareholders, presents the numbers: the stock is up 130% since the beginning of the year, making Palantir the best-growing company in the S&P 500 index.

This article was AI-translated and verified by a human editor